author: Flannagan, C. P. J.

text:
    Essex County Court of Common Pleas.
    CATHERINE RELAY, PETITIONER-APPELLEE, v. CONTINENTAL AMERICAN LIFE INSURANCE COMPANY, RESPONDENT-APPELLANT.
    Decided June 13, 1944.
    For the respondent-appellant, Saul J. Zucker.

    For the petitioner-appellee, John A. Laird.

   Flannagan, C. P. J.

On August 22d, 1941, Irving Belay was engaged in the business of soliciting life insurance for the respondent, Continental American Life Insurance Company. His title was that of general agent. His compensation was, at the time, purely on a contingent commission basis. The company maintained an office and stenographer for his use in room 2011 on the twentieth story of the National Newark and Essex Banking Company building in the City of Newark. On that day Mr. Belay had lunched with his wife at a restaurant, had something to drink there and had gone with her to her mother’s home leaving her at about 4:30 P. M. saying, as she testifies, that he was going to his office.

Mr. Belay at the time was in worrying financial status. He had been previously married and was divorced and had been in serious arrears in his payments of alimony and support for his child by his first wife. After proceedings in contempt had been brought he had accomplished a settlement, but it would seem he was probably in arrears in payment of support for the child and he was in default on notes which he had given on the settlement in compromise of the accumulated alimony. He was in debt to his insurance company-on a loan and had had trouble with the company over his bad checks sent for premiums collected by him and in regard totas failure to pay over premiums collected. He was at the-time in arrears in that regard. He carried a policy on his own life, the premium upon which was unpaid and the days-of grace expired the day before his death. There was pending in the bankruptcy court an application bv him for discharge in bankruptcy and objections to his discharge had been filed on the morning of August 22d, 1941, at 10 :30 A. M.

After leaving his wife (August 22d, 1941) and at approximately 7:00 to 7:30 p. m. Mr. Eelay appeared at the National Newark and Essex Bank Building. Where he had been or what he had done during the intervening period from 4:30-o’clock when he left his wife does not appear. He appeared at the bank building without hat or coat and wore bright-suspenders. He asked the operator operating elevator No.. 14 to take him to the twentieth floor. Being asked by theóperator how he felt he answered “not so good.” The operator took him to the twentieth floor as requested and saw him start along the hallway towards room 2011, the said office-provided for him by the Insurance Company, the respondent..

Some minutes thereafter the janitress or cleaner, Mrs. Zeh, who was cleaning the office of Mr. Eippel on the second floor of the Eippel Building, saw from the window of that office the body of Mr. Eelay descending in the air, strike the-ground in the parking lot, face downward and turn over. She screamed and she and her husband, who was an employee-of the Eippel Building, went to the scene to render Mr. Eelay any possible help. Mr. Zeh was the first person on the seenewhere the body lay. His wife called the police. Mr. Eelay died almost immediately on striking the ground.

Andrew Murray, senior watchman of the bank building,, testified that having been told about 7:30 by the elevator man that he had taken a man to the twentieth floor who seemed. to be “very sick,” he took the police to that floor and there-he saw something on the hall floor, “a sort of slimy substance.” He found the window at the end of the hallway on the twentieth floor open. Police Officer Reilly testified that he found what he described as “vomit,” on the hallway floor and window sill on the twentieth floor. The window on the twentieth floor is at the end of the hallway and overlooks-the ground or parking space, as it is called, where the body of Mr. Relay landed.

The petitioner, Catherine Relay, widow of the decedent, brought proceedings in the Compensation Bureau claiming-that Mr. Relay came to his death by virtue of an accident arising out of and in the course of his employment. She was successful, the Bureau granting awards aggregating over $16,000. Respondent now appeals to this court.

The respondent contends: (1) that the death was a suicide; (2) that the deceased, Mr. Relay, was an independent contractor; and (3) that the accident (if it be one) did not-arise out of and in the course of his employment.

It is patent that upon the question at issue as to whether the petitioner’s deceased precipitated himself from the said hallway window or accidentally toppled out of it, that the point where he landed twenty stories below in the parking space is important. If he toppled out he would naturally fall close to a point directly under the window but if he jumped out he might land some distance away from that point. The respondent contends that he landed about forty-five feet in a northeasterly direction from a point on the ground immediately under the said window, the point of landing being twenty feet out from the wall of the national ISTewark and Essex Building and thirty feet out from the wall of theRippel Building. The wall of the Rippel Building in which Mr. Rippel’s office window opens bounded the southerly side of the parking lot while the wall of the bank building in which the said twentieth story window opens, bounded it on-the westerly side. The physical situation is shown on a diagram drawn to scale and marked Exhibit R-10.

In fixing the point where the body landed the respondent-relies upon the testimony of petitioner’s witness John Zeh,. upon the fact that the wife, another petitioner’s witness, says she saw the falling body before it struck the ground from the window of Mr. Rippel’s office, and upon the photos taken by the police of the body and surrounding objects as it lay in the parking lot.

Mr. Zeh in his testimony estimated the position of the body as twenty feet out from the wall of the bank building and thirty feet out from the wall of the Rippel Building. He characterized his estimate on cross-examination as “guess” but it was obviously an estimate before his characterization as well as after. Whether it be called a guess or an estimate is not of great moment; it was evidently his best effort to locate the point after a lapse of about two years. Respondent argues from the diagram that as twenty feet out from the bank building is exactly opposite Mr. Rippel’s office window from which Mrs. Zeh says she saw the body falling in the air that this part of her testimony tends to confirm her husband’s testimony that it landed twenty feet out from the bank building.

The proof in regard to the point where the body lay after the fall is left in a very unsatisfactory status. The respondent contented itself with relying on the said testimony of the petitioner’s said witnesses and on the photos taken by the police. The record shows that Officer Reilly, another officer, Troy, who was with him, the elevator man who took Mr. Relay to the twentieth floor, and Andrew Murray, the superintendent, all saw the body lying in the parking lot and yet none was asked its position by either side. The record also indicates that the ambulance surgeon, members of the emergency squad including Sergeant Stein and Officers Abbot and O’Leary must have seen the body where it lay and yet none of these persons, who were apparently eye witnesses of the location, was called by either side.

In further support of its claim that decedent precipitated himself from the window the respondent produces testimony that in order for the body to land at the point indicated by Mr. Zeh it would have to have left the window at a velocity in a lateral direction equal to about one-half that of a runner traveling at the rate of 100 yards in ten seconds. Respondent also introduces detailed measurements of the twentieth floor hall window sill, arguing its construction to be such as to make it difficult, for one to fall out of it unintentionally.

Taking all the circumstances together I am inclined to the opinion that “the preponderance of probabilities, according to the experience of mankind” is that Mr. Belay, sick and in a period of depression intentionally projected himself from the window; although it may well be that the answer as to how he came to his death whether by accident or design remains, on the evidence adduced, in the realm of speculation rather than in that of proof. Cf. Kramerman v. Simon, 131 N. J. L. 251; 36 Atl. Rep. (2d) 132.

However, I prefer to rest my decision on another ground, to wit, that petitioner has not sustained the burden of proof by a preponderance of the evidence that decedent, Mr. Belay, came to his death by an accident arising out of his employment.

Assuming that Mr. Belay was not an independent contractor, that he started down the hallway from the elevator for room 2011 for the purpose of performing duties in furtherance of his employment, that he came back to the hall window on the twentieth floor and fell accidently therefrom, it still remains that it must be shown by proof that the injury arose out of his employment. I am of the opinion that it does not so appear.

The immediate and controlling cause of Mr. Belay’s going to the window was not for the purpose of performing services for his employer, it was to relieve himself of his sickness. There is nothing to show that his sickness arose out of or was caused by anything done while doing anything in the performance of the duties of his employment or that it had any connection with his employment. It was a stomach upset with the customary reaction, namely, a desire to vomit. The window was a point of danger outside and away from the premises of his employer. If his nausea be regarded as a call of nature there was the usual appropriate, convenient and safe place to relieve himself under such conditions made available by his employer, namely, the toilet or lavatory.

It is argued that the toilet may have been locked but there is nothing in the evidence which supports this hypothesis evolved by petitioner’s counsel.

The diagram of the building shows that in going from room 3011 to the window at the end of the hallway Mr. Relay had to pass a short connecting hallway leading to the toilet and that the toilet was about as near to room 2011 as was the window at the end of the hall. He elected to go outside the working premises to a place of danger, unusual, unappropriate and unused for the instant purpose when a safe, customary, suitable and convenient place had been made available by his employer. His action and consequential injury did not arise out of his employment, or, indeed, in the course of it.

The case of Reynolds v. Passaic Valley Sewerage Commission, 130 N. J. L. 437; 33 Atl. Rep. (2d) 595; 131 N. J. L. 327; 36 Atl. Rep. (2d) 429, is cited by petitioner, but it seems to me not in point. In that case a shanty 5% by 6 feet containing a pot stove was provided by the employer for the use of a watchman in the discharge of his employment. The watchman, who was partially paralyzed fell in an epileptic fit against the stove and was, as a result, burned. Thus it appears that the employer had established a dangerous locus of employment in the form of the cramped quarters with the pot stove therein which contributed to the injuries sustained by the employee. The stove and surrounding circumstances-established by the employer constituted a dangerous instrumentality incidental to the employer’s business which constituted a contributing cause to the workman’s injuries. 3STo .such situation exists in the instant case. In that case the sickness causing the accident did not arise out of the employment, hut the injury did; while in the instant ease neither the sickness nor the injury arose out of the employment.

I conclude that the petitioner has failed to sustain the burden of proving that the decedent came to his death by an accident which arose out of his employment. Cf. Kramerman v. Simon, supra.

A determination may be submitted under rule 9 in accordance therewith, dismissing the petition.


source: Caselaw Access Project

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

license: Public Domain

text:
    Essex County Circuit Court.
    MURRAY B. STONE, ALEXANDER H. STONE, E. DAVID STONE, SARAH STONE AND ANNA L. STONE, CO-PARTNERS DOING BUSINESS AS STONE & STONE CO., PLAINTIFFS, v. WILLIAM STEINEN MANUFACTURING CO., A CORPORATION, DEFENDANT.
    Decided June 19, 1944.
    For the plaintiffs, Milton M. Unger.

      For the defendant, Pitney, Hardin & Ward (Charles B. Hardin).

   William A. Smith, C. C. J.

This action by consent was tried before the court without a jury on May 8th, 1944, and the decision thereon was taken under advisement, and since that time counsel have submitted their briefs.

The suit is brought to recover two weeks’ salary at $400 a week based upon a written agreement of employment entered into on December 31st, 1943, but it was provided therein that it should be operative and effective as of July 1st, 1941, the period of employment to run for three years from July 1st, 1941, until June 30th, 1944, the salary payable each week commencing the 1st day of July, 1941.

The agreement provided that the plaintiff partnership would by means of the personal service of one or more of them assist the defendant in its dealings with such departments, agencies, and officers of the United States Navy relating to contracts sought or obtained by the defendant from the United States Navy and the departments and agencies thereof. The employment was not to be an exclusive one, the plaintiffs retaining the right to engage in other pursuits and represent and serve other employers and concerns for whom they might secure or endeavor to secure contracts with the United States Navy or any departments thereof, even though such employers might be competitors of the defendant.

The complaint alleges that the agreement was supplemented by another agreement made December 31st, 1943, effective July 1st, 1941, but no recovery is sought upon this supplemental agreement. Copies of the agreement and of the supplemental agreement are made part of the complaint. Plaintiffs allege performance of the contract on their part and a failure on the defendant’s part to pay the installments of salary due September 11th and September 18th, 1943, of $400 each, amounting to $800.

The defense set up is that the agreement is illegal because it is against public policy, or to state it more properly, that the consideration for the agreement in question is in part illegal as against public policy.

It 'will be noted that the agreement in suit was not entered into until December 31st, 1942, and was to be effective as ol July 1st, 1941. At the trial evidence as to the previous relationship between the parties and their previous arrangement or contract governing the compensation for their services from July 1st, 1941, was admitted in evidence, and the abrogation of the agreement which governed the relationship of the parties from July 1st, 1941, to the date of the agreement sued on became part of the consideration for the agreement sued on. The payment of the stipulated salary from July 1st, 1941, to December 31st, 1941, was provided for in the contract sued on by the defendant paying to the plaintiff the sum of $27,000 together with the allowance of $4,200 theretofore paid by the defendant to the plaintiff, it being provided that the total of the two, amounting to $31,200, should constitute payment in full for the stipulated salary from July 1st, 1941, to December 31st, 1942.

This contract of employment also provided as follows:

“It is also understood and agreed that the death, withdrawal or disability (for any cause whatever), of one or more members of said co-partnership shall not terminate this contract or operate to lessen, restrict, qualify, impair or in any way affect the 'employer’s’ liability to pay the weekly salary hereinabove stipulated to the end of the three-year term of employment herein created (and any extension thereof as hereinbelow provided), which liability to pay said weekly salary to said co-partnership for the surviving members thereof shall continue, persist and endure to the end of the three-year term of employment so long as there remains or remain alive one or more of said co-partners ready and willing to perform the duties by this agreement assumed by the 'employee’ herein.”

While the suit is brought by the partnership, which consists of three brothers and the wives of two of them, the original transaction with the defendant was entered into by Alexander H. Stone, and he acted in the matter throughout the entire relationship with the defendant except in minor instances when he was not available. The women members of the co-partnership took no active part.

The facts leading up to the execution of this agreement and the institution of the suit are found to be that the defendant had a plant considered adaptable for doing manufacturing work for the United States Navy. The defendant had tried but had been unable to obtain any direct prime contracts from the Navy. A short time previous to July 1st, 1941, the defendant was referred to Alexander Stone by a Mr. Aronson, for whom Stone had obtained contracts from the Navy; it also appeared that there were three other firms for which the Stones had done similar service. It was represented to the defendant that the services of Alexander Stone might be obtained upon the same terms as those upon which he represented these other firms.

■ It appears in so far as Alexander Stone is concerned that he had given up a business as a mortgage loan broker which he conducted in Newark, New Jersey, and went to Washington, where he was employed by the Federal Housing Authority for a period of years, and that in 1940 Mr. Stone began dealing with the Navy in procuring contracts for parties he represented, holding himself out to be a manufacturers’ representative. It does not appear that Mr. Stone had any technical background in reference to obtaining contracts or that he was employed, in reference to the work with the Navy, in any technical capacity.

The defendant decided to employ Stone: An arrangement was entered into the terms of which are embodied in an undated letter which was written on or about July 1st, 1941, by the defendant to Alexander Stone. A copy of this contract is attached to the defendant’s answer and is referred to as ■Exhibit A and it was put in evidence by the plaintiff as Exhibit P-S. This letter of employment states that the defendant is desirous of having a duly accredited representative to assist it in the handling of the necessary details in bidding and negotiation for government contracts with the Navy Department for materials and supplies and m closing and performing such contracts. The period of employment was referred to as commencing July 1st, 1941, and ending June 30th, 1944. It contemplated Mr. Stone’s advising and consulting with the officers and employees of the company with respect to government contracts for materials and supplies for the Navy Department to be manufactured by the defendant with respect to performing such contracts; that Mr. Stone should consult with the duly authorized Navy Department procurement officers and technicians in connection with bids and negotiations looking toward such government contracts for the Navy Department as well as the performance by the company of the terms thereof, and that Mr. Stone’s time need not be devoted exclusively to the business of the company. The compensation was provided as follows:

“(a) At the time of the acceptance of the materials and supplies by the Government for the Navy Department with a sum equal to two and one-half per cent. (2%%) of the amount contracted to be paid to the company by the Government therefor;

“(b) At the time of the receipt by the company of payment in full for such materials and supplies with a sum equal to two and one-half per cent. (2%%) of the gross amount so received.

“Such credits shall be adjusted periodically by payment to you less in each instance the amounts advanced in accordance with the provisions of item 4.”

Item 4 provided for a drawing account of $150 a week so long as the sums paid were less than five per cent, of the total amount being paid on the contract.

The fifth clause of the contract had a provision about its termination due to death or the option of the company, but such termination was precluded in so far as compensation was payable under contracts executed and delivered prior to its termination.

The seventh provision of the contract is as follows:

“In the event that the company is not permitted to deduct from its gross income for the purpose of determining its net taxable income (United States or any political subdivision thereof) the amount payable to you under Item 3 or Item 6, such amount payable to you under either of said items shall be reduced by an amount equal to the additional normal income taxes payable by the company by reason of the dis-allowance of such deduction.”

The employment also provided that Mr. Stone was to pay his own traveling and other expenses.

The plaintiff Alexander Stone was not employed in any technical capacity, bnt his work in the first instance was to obtain the inclusion of the name of the defendant on an approved list of bidders, namely, to obtain for the defendant from the Navy Department an invitation to bid. This he did. It appears by the evidence in the case he also attended to the preparation and submission of bids, and after the award of the contracts his duties were principally, if not solely, to attend to the contracts between the defendant and the Navy Department and its representatives. The important part of this work included the obtaining of additional machinery from the government so as to extend the defendant’s plant in order to perform the work under the contracts, the expediting of the payments due under the contract, and I gather from the evidence that what the plaintiff Alexander Stone did in this case was about the same work that he did for the other concerns which employed him where he obtained the contracts from the Navy Department. I am satisfied that most of this work entailed contact with representatives of the Navy Department.

In this ease two contracts were obtained, one dated August 9th, 1941, and the other September 18th, 1941, which provided for payments aggregating approximately $1,700,000. The contracts with the government contained the following provision :

“Article 11. Covenant against contingencies. The contractor warrants that he has not employed any person to solicit or secure this contract upon any agreement for a commission, percentage, brokerage, or contingency. Breach of this warranty shall give the Government the right to annul the contract, or, in its discretion, to deduct from the contract price or consideration the amount of such commission, percentage, brokerage, or contingencies. This warranty shall not apply to commissions payable by contractors upon contracts or sales secured or made through bona fide established commercial or selling agencies maintained by the contractor for the purpose of securing business.”

The first payments, five in number, I believe, ran up to June 10th, 1942. Thereafter deductions were made by the Navy Department from these payments up to August 7th, 1942, to cover five per cent, of the amount of those payments and the previous payments from which deductions had not been made, and from August 7th, 1942, to March 3d, 1942, deductions of five per cent, were made from each payment. The total billing by the defendant to the United States Navy up to March 3d, 1943, was $853,460; the net payments were $810,102.10. This difference between the amount billed and the amount paid is accounted for by deductions for cash payments and a deduction of five per cent, on the amount of the payments.

These five per cent, deductions were made by the Navy Department because under the terms of its contract the defendant was required to submit its figures with reference to the costs and profits, and in the statement submitted it appeared that the plaintiff Alexander Stone was being paid five per cent, on the contract, stated as selling expense, the government taking the position that article 11 prohibited such fees, and deducting them from the payments as excessive for the materials delivered.

Mr. Stone’s claim as to the reason for the change in the contract is that they were considering changing from a commission basis to a salary basis because the money involved was so great on a commission basis, namely, that they had not anticipated it would amount to so much money and that' they did not want to build up a ninety per cent, cash fund to pay taxes but preferred to have the compensation paid by way of salaries for approximately the amount which they would receive on a commission basis. It appears, however, from Mr. Steinen’s testimony that Mr. Stone was investigated by the Vinson Congressional Committee and that Mr. Stone advised the defendant that if the compensation was reduced and put in the form of a salary that it might be passed by the government, and I am satisfied that it was the government’s claim, through the attorney for the committee, or from the Navy Department itself, that prompted Mr. Stone to advocate the change. The government evidently did not consider Mr. Stone an accredited representative as contemplated. by the exception in article 11 of the contract, the exception of that provision being that it should not apply to commissions on contracts or sales “made through bona fide established commercial or selling agencies maintained by the contractor for the purpose of securing business.”

• I am satisfied that the evidence in this ease discloses that Mr. Stone did not come within the ground of this exception. The deduction of the five per cent, which the Navy Department had made from the payments to the defendant was a serious matter to the defendant because this five per cent, which was disallowed would come out of the profits that the defendant made on the contract, and not be an expense in its performance, and therefore could not be considered as an expense in the performance of the contract in the computation of the defendant’s income tax. Mr. Stone claimed that this deduction would not have been made if the allowance had been properly reflected in the setting up of the costs under the contract, saying that it should have been put in as an administrative expense and not as a selling expense, and if it had been put in as an administration expense it would not have been disallowed.

' Dor the reasons I have stated they entered into the agreement sued on and the supplement which was to take the place of the original agreement of employment entered into about July 1st, 1941. It is perfectly evident that the purpose of the agreement sued on was to endeavor to overcome the objection to the payment of the five per cent., by changing the payments from a contingent commission of a percentage of the amount of the contracts to a salary basis, and for a reduction of the amount of commission from five to four per cent, to meet the claim of excessive payment. The amount of the salary fixed in the new agreement I believe works out to a payment of four per cent, on the amount of the contract spread over the period as salary.

We therefore have as a result of these changes a reduction of the rate of commission from five per cent, to four per cent., and a change of the payments from contingent commission to salary; the new arrangement for payments was for the carrying out of the original arrangement of contingent commission but reduced from five to four per cent.

It is important to note that the supplemental agreement entered into simultaneously with the execution of the agreement sued on for all practical purposes is in effect a provision to pay a contingent commission on new contracts or renewals or extensions of existing contracts, the contingent commission being paid in the form of salary for an extended period.

My conclusion from the three agreements and the other evidence submitted is that the prime purpose of employing Stone was to secure favorable action from the representatives of the United States Uavy in obtaining the right to bid, the award of contracts, and if successful in the award of the contracts, action on Mr. Stone’s part on behalf of the defendant in obtaining action from the representatives of the Uavy favorable to the defendant in the matter of carrying out the contracts secured from the Navy Department.

The defendant claims that the service Mr. Stone contracted to perform cannot be legally contracted for on the basis of payment to be made contingently on a commission basis on the ground that such agreement is against public policy. As has been stated, the defense is that the contract sued on is the substitution of an agreement which is void as against public policy, and the consideration in part for the agreement sued on is the completing of the payments under the contingent contract.

The general principle involved is that contracts which tend to injure the public service of the government are against public policy and void, particularly where they influence executive or administrative action, and especially contracts, which provide for a contingent compensation.

It is not necessary for me to review cases upon these principles; the principles and their application, together with the cases, are reviewed in 17 Corp. Jur. Secundum, Contracts, p. 573, § 212; p. 577, § 214; 12 Amer. Jur. p. 703, § 202; p. 707, § 205; p. 709, § 206; p. 711, § 207; Old Dominion Transp. Co. v. Hamilton, 146 Va. 594; 131 S. E. Rep. 850; 46 A. L. R. 196; Hall v. Anderson, 18 Wash. (2d) 625; 140 Pac. Rep. (2d) 266; 148 A. L. R. 768; 6 R. C. L. 707, 741.

Counsel for both the plaintiff and the defendant in the argument before the court referred to the principle set forth in the Restatement of the Law of Contracts of the American Law Institute under sections 562 and 563, which are as follows:

“Section 562: A bargain to endeavor to secure a public contract by presenting to the official having power to make the contract inducements except such as relate to the desirability on public grounds of entering into the contract, is illegal; but if no influences other than these are bargained for, or contemplated, the bargain is not illegal.

“Section 563: The fact that compensation fixed in a bargain for efforts to secure legislation or official action is contingent on success, is not conclusive evidence that improper means are contemplated in securing the desired result.”

It is urged by the defendant that the New Jersey rule is stricter than the principle in the Restatement, and the case of Weehawken v. Hass, 13 N. J. Mis. R. 231; 177 Atl. Rep. 434, is cited. In that case suit was brought upon a contingent contract made with the plaintiff for services to be rendered in obtaining a reduction of a tax assessment, and our Supreme Court held that such a contract was void as against public policy, inferentially holding that it was not necessary to prove that there was any sinister motive. The New Jersey annotations under section 563 of the Restatement of the Law of Contracts indicate the New Jersey variance in this case from the rule in the Restatement.

It is not necessary to determine whether or not the case of Weehawken v. Hass, supra, applies so as to hold that the mere fact that the employment was a contingent one on a percentage basis renders the contract in suit and the one which forms the consideration for it, void as against public policy. I can see that we may have contingent percentage contracts employing individuals to represent principals in preparing bids and obtaining contracts from public agencies without their being void as against public policy.

It seems to me that the rule which I should follow in this case in order to determine whether this contract is void as against public policy and cannot be enforced is: Does the arrangement between the plaintiffs and the defendant involve or promote sinister or corrupt means to accomplish its end and tend to bring influence on the representatives of the Navy Department to act other than to the sole advantage of that department and the government which it represents?

My guide in determining the question presented is clearly set forth in the opinion of Chief Justice Rugg in the case of Noble v. Mead-Morrison Manufacturing Co., 237 Mass. 5; 129 N. E. Rep. 669 (at p. 674), where he says:

“The general principle fairly deducible from the decisions is that ordinarily no one factor is decisive in determining whether the contract concerning furnishing supplies to the government is void as contrary to public policy. Contingency of compensation upon success, percentage upon the amount involved in sales directly to the government, and the size of the fee, all are elements entitled to consideration. The words 'contingent compensation’ in connection with a contract may be used either in an obnoxious or a harmless sense. The tenor of the contract may be such in connection with its setting as to' stamp it with invalidity. If it bears any badge of fraud, either covertly or openly,' it must be stricken down. The question of the legality of the contract in each case is to be determined by weighing all the elements involved and then deciding whether its inherent tendency is to invite or promote the use of sinister or corrupt means to accomplish the end or to bring influences to bear upon public officials of any other nature than the single one of genuine advantage to the government. If such is its tendency, it must be pronounced illegal. If that point is open to fair dcubt upon all the evidence, its purpose must be left to the jury under appropriate instructions.”

Under the rule I am to follow I am convinced it is unnecessary to prove that the parties themselves contemplated sinister or corrupt means, or that the representatives of the government should act otherwise than for the advancement of the government.

■This is so indicated by our Court of Errors and Appeals in Brooks v. Cooper, 50 N. J. Eq. 761 (at p. 773); 26 Atl. Rep. 978, 982, where the court says:

“All agreements, for financial consideration, to control or influence the business operations of the government, or the appointment of public officers, are void as against. public policy, without reference to the question whether improper measures are contemplated or used in their execution. The law looks to the general tendency of such agreements, and it closes the door to temptations by refusing them recognition in the courts.”

The court then cites Providence Tool Co. v. Norris, 2 Wall. 45; 17 L. Ed. 868, and other cases, and says:

“And so considerations of the same kind, of inferior moment, apply, whenever the necessity or even probable effect of the contract will be to divert any public servant from the path of duty, or cause favoritism or interest to prevail in the determination of questions which should be examined with a view to the general good and the just claims of the parties in interest.”

The test is: Mas a contract such as the one we are considering such a tendency ? The question is one of fact for the court sitting without a jury.

That the parties actually intended that sinister or corrupt means were to be used, or that the representatives of the government should act otherwise than in its interest, was not proved in this case. So in order to pass on the question of whether the consideration of this contract is illegal it' is necessary for me to examine the facts in this particular case in order to determine if it is a contract of such a character as tends to the use of sinister or corrupt means, or to influence the representatives of the government in acting otherwise than in the advancement of the best interests of the government.

The facts appear to be that Mr. Stone was a man who was not trained technically in the matters involved in the performance of the contracts. The services which he had been rendering were largely, if not wholly, with reference to procuring for his clients contracts with the Wavy Department of the United States, and helping his client with that department carrying out the contracts.

I do not mean to imply that the plaintiff Alexander Stone did not do valuable work; he did, bnt it was work that conld be done by an experienced sales representative who was familiar with the details of negotiating with the government departments. Mr. Stone himself says in his testimony that there was nothing mysterious about his work, that “when yon have the ability you can get this business without knowing anybody.” Bnt he said you had to know yonr way around and therefore conld save a good deal of time.

As to Mr. Stone’s work Mr. Steinen tells us in criticising the statement as to the amount of work that Mr. Stone says he did, that his statement was grossly exaggerated, and I believe him when he so states. Mr. Steinen said he had no technical work to do; that that was secret.

The quantum of services which he rendered or which it was contemplated that he render under the contracts in question, was entirely out of proportion to the amount of compensation involved; on contracts involving over $1,700,000 he stood to make under the original arrangement within a period of about three years around the sum of $85,000.

Mr. Stone and his brothers represented four other concerns in dealing with the Uavy Department. It does not appear, so far as I can recall, that he had any other clients. These four other concerns were the A. C. Gilbert & Company, the Unique Art Manufacturing Company, the Lee Tire Company, and the Lionel Corporation. He testifies to the amount ■of money received from these companies after being put on a salary basis, which I understand was a change from a commission basis similar to what the arrangement was with the ■defendant. The salary with the Lionel Corporation was $500 .a week running until 1947, with the Gilbert Company $400 ■a week pins one per cent, commission until 1947, with the Unique Art Manufacturing Company $200 a week and bonus which amounted last year, he said, to $400 a week, and from the Lee Tire Company he had received compensation but that had stopped owing to the fact that they had ceased doing .the character of work that the plaintiff had negotiated for. It thus appears that the plaintiffs were receiving nearly $100,000 a year in representing those five companies, and I cannot escape the conclusion that the services rendered the others could not have warranted the amount of compensation received.

As to his equipment for this service, the plaintiff did not maintain an office except at his home in Washington, and he employed no help except part-time employees. The arrangement, as has been stated, was originally made with Alexander Stone, who testifies that his business was for the partnership; but the partners were relations, and the women who were in the- partnership did practically nothing with reference to rendering service to him. In this particular case Alexander Stone was the only man that did anything with reference to the contract, ■ except on a limited number of occasions when he was absent and his brother might have acted for him.

• We-must take into consideration the fact that this arrangement of having his office at his residence was not conducive to conducting the business along strict business lines; it opens the door to inducing the representatives of the government to conduct their business at the plaintiff’s residence, and this is not always a wholesome atmosphere in which to confine transactions to strictly those executed on behalf of the best interests of the government through its representatives.

An examination of the terms of the original contract, the supplemental contract, and the one on which suit is brought, leads to the conclusion that it is one which is conducive to the use of sinister means. By the terms the representation was limited to dealings with the United States ISTavy and its departments as distinguished from other government departments. • The inference is that Stone held himself out as being influential in his relations with representatives of the bTavy Department. If this were not so why should he have limited his services to the United States Navy and its departments?

The provision which requires the contract to continue as long as there remains one member of the plaintiff firm, indicates that it is not so much the services that are to be rendered for which compensation is paid, but that the compensation is for the services that have been rendered in the obtaining of the contract. Clearly there would be no object in continuing this contract for services if the two women or one of them were left as survivors of the firm.

I must therefore conclude that this provision with regard to employment as a representative on a salary is a mere blind for the purpose of covering up the fact that the compensation is for a percentage of the contract; otherwise why should the supplemental contract be made separate and without reference to it in the contract sued on?

I must therefore conclude from the facts as I have set them forth that the contract sued on and the consideration on which it is based is void as against public policy and judgment should be entered in favor of the defendant and against the plaintiffs.


author: Collester, D. C. J.

text:
    Clifton District Court.
    FAMOUS FURNITURE CO., A CORPORATION OF NEW JERSEY, PLAINTIFF, v. J. FISHMAN & SON, INC., A CORPORATION, AND BENJAMIN FISHMAN, DEFENDANTS.
    Decided August 23, 1944.
    For the plaintiff, Riskin & Riskin.

    For the defendants, Herman D. Edelson.

   Collester, D. C. J.

This is an action brought by the plaintiff, Damous Durniture Co., a Sew Jersey corporation, a conditional vendor under a conditional sales contract bearing date May 29th, 1941, wherein one, Dranldin A. Dean, was the conditional vendee. The defendant J. Dishman & Son, Inc., a New Jersey corporation, is a warehouseman and the defendant Benjamin Dishman is an officer of the latter corporation.

The evidence shows that on September 29th, 1942, Dean, the conditional vendee, stored the furniture listed under the conditional sales contract with the defendant J. Dishman & Son, Inc., under an agreement to pay storage charges at the rate of $8 per month, and that said Dean was duly issued a warehouseman’s receipt therefor. Dean having failed to pay the warehouseman’s charges, the defendant corporation sold the chattels at a public sale held on September 6th, 1943.

It appears that the plaintiff never filed its conditional sales contract in the Passaic County register’s office. About four months after the goods were deposited by Dean with the defendant warehouseman, the plaintiff’s representative informed the defendants that plaintiff was a conditional vendor of the goods and therefore was entitled to possession thereof. The defendants refused to deliver up the chattels unless the warehouse charges were paid. Negotiations for a settlement of the claim continued for several months until the defendant corporation finally sold the chattels at public auction. The sole issue for determination is whether the title of the conditional vendor, who failed to record his conditional sale contract, is paramount to that of a warehouseman.

The Uniform Conditional Sales Act provides as follows:

R. S. 46:32-13; N. J. S. A. 46:32-31. “Every provision in a conditional sale reserving property in the seller, shall be void as to any purchaser from or creditor of the buyer, who, without notice of such provision, purchases the goods or acquires by attachment or levy a lien upon them, before the contract or a copy thereof shall be filed as provided in this chapter, unless such contract or copy is so filed within ten days after the making of the conditional sale.”

R. S. 46:32-2; N. J. S. A. 46:32-2. “When used in this chapter * * * 'Purchase’ includes mortgage and pledge. 'Purchaser’ includes mortgagee and pledgee. * * *”

The Uniform Warehouse "Receipts Act establishes a lien for a warehouseman for goods deposited with him — “for all lawful charges for storage and preservation of the goods. * * *” N. J. S. A: 57:1-30.

R. S. 57 :1-31; N. J. S. A. 57:3-31 provides:

"* * * a warehouseman’s lieu may be enforced: * * (b) against all goods belonging to others which have been deposited at any time by the person who is liable as debtor for the claims in regard to which the lien is asserted, if such person had been so entrusted with the possession of the goods that’ a pledge of the same by him at the time of the deposit to one who took the goods in good faith for value would have been valid.”

Can a warehouseman who admittedly has a lien on goods stored with him by virtue of the Warehouse Keeeipts Act be considered a pledgee within the meaning of the Conditional Sales Act? It is the opinion of this court that he can.

The goods stored with the warehouseman are not only deposited for safe keeping but under the Warehouse Keeeipts Act, the depositor pledges the goods as security for the payment of the storage charges, and the warehouseman under the law is given a lien upon the goods as complete and effective as though the.goods had been pledged for a specific sum of money.

It is the opinion of this court that as a pledgee he stands in the same position as a “purchaser” of the goods who acquires the same without notice of the conditional sales contract.

It is undenied that at the time Dean deposited the chattels with the defendant corporation that the defendants were unaware of the existence of the conditional sale contract between the plaintiff corporation and Dean. The fact that the defendant corporation continued to store the goods after learning of the existence of the contract in no way alters defendant’s position.

In an unreported decision in the case' of General Electric Contracts Corp. v. Samuel Kochansky et al., District Court Judge Melniker, sitting in the District Court for the City of Bayonne, passed upon a similar situation. In so doing he made the following statement in which this court concurs:

“I am the more readily led to this conclusion because to hold otherwise would be to leave the warehouseman practically helpless against the vendor in an unrecorded conditional sales contract, who has put it in the power of the vendee to perpetrate a fraud upon an innocent third party. The conditional vendor could have protected himself and others by the simple expedient of recording and filing the sales contract. The unfortunate plight of the warehouseman cannot be laid at the door of his own dereliction. No reasonable inquiry could protect him against imposition. Under the circumstances, therefore, the loss should fall upon him who has the means of preventing it and failed to exercise them, rather than upon him who had no such opportunity. ‘When one of two innocent persons must suffer, the loss must fall upon him who put it in the power of third persons to cause the loss.’”

It is therefore the decision of this court that judgment for possession of the chattels should be entered in favor of the defendant J. Fishman & Son, Inc., a corporation of New Jersey, and Benjamin Fishman, individually.


author: Delaney, C. P. J.

text:
    Passaic County Court of Common Pleas.
    BENJAMIN SPITZ, PETITIONER-APPELLANT, v. NATIONAL RUBBER MANUFACTURING COMPANY, RESPONDENT-APPELLEE.
    Decided October 4, 1944.
    For the petitioner-appellant, David Cohn.

    For the respondent-appellee, Manfield G. Amlicke.

   Delaney, C. P. J.

Petitioner-appellant filed a petition •on July 26th, 1943, in the Workmen’s Compensation Bureau for compensation for an alleged injury resulting from an .accident claimed to have been sustained by him on May 13th, 1943, while in respondent-appellee’s employ. The matter was heard on its merits in the Bureau on December 29th, 1943, and January 26th, 1944, with the result that the petition was dismissed. From that determination the petitioner has appealed.

The, petitioner testified that about three o’clock in the morning of May 13th, 1943, while he and a co-employee were • engaged in placing a rotor, weighing 250 or 300 pounds, upon . a two-wheeled truck, the rotor slipped, the truck moved, and in moving struck the petitioner and forced him against a neighboring machine, and that his back was injured thereby. His fellow-workman, who was authorized to administer first .aid in minor accidents, testified to like effect.

The record raises three questions: Did the alleged accident occur at all? If so, is the disability, if any, from which petitioner suffered, the result of the accident, either as the primary cause or by way of aggravating a pre-existing condition? And, finally, did his employer have knowledge or timely notice of the injury?

Fabrication and evasiveness so abound in the testimony of the petitioner as to strip it of probative force. It is refuted on highly material points by disinterested and trustworthy witnesses. When searching and probably not anticipated questions were propounded to the petitioner, he pretended a loss of recollection, notwithstanding that in the circumstances he should and must have recollected. He admitted that he had had two other and earlier accidents than the one claimed in the present proceeding. He placed the more recent of these two earlier accidents as having happened somewhat more than a year before December 29th, 1943, and said that he had instituted some sort of suit or proceeding to recover for a hurt to his stomach, but did not remember whether he had claimed an injury to his back also or whether he had testified in the matter; and when asked and pressed for an answer, whether he had recovered, he twice said, “I think I did,” but had no memory on the point of the amount. The more remote of his two earlier accidents occurred in 1936. He remembered also that he was paid for damage to his truck, but whether he then made a claim for personal injury as well he did not recall. He testified that on the following day of his alleged accident of May 13th, 1943, and once again in the following week, his back was baked at the New Jersey Manufacturers Hospital in Clifton, but whether he was there examined by a physician he could not recollect. His impairment of memory, while remarkable, pales in comparison with his mendacity.

Dr. Harry Yolken examined him on November 14th, 1943, apparently for the purpose of fixing the extent or degree of his alleged disability, and saw him in connection with this matter then only. The doctor neither said nor intimated that he then treated the petitioner or recommended treatment.

To Dr. Andrew O. Bnoff, who examined the petitioner at the instance of the respondent on December 14th, 1943, the petitioner said that Dr. Yolken had administered treatment to him for this injury “on three or four occasions,” or, in the petitioner’s own version, “a few times.” As already noted, the petitioner swore that he was twice treated at the New Jersey Manufacturers Hospital.

His testimony on this point was contradicted and shattered by the person in charge of the desk and records of the hospital. Her testimony was convincing and conclusive, and counsel for the petitioner stipulated that if the nurses at the hospital were called they would testify that they had no recollection or record of ever having administered treatment to the petitioner.

The fact is that apart from the testimony of the petitioner and his co-employee, Morris Goldstein, that the latter rubbed the former’s back with liniment on the morning of May 18th, there is not a line in the whole body of the credible evidence that in the interval between May 13th, when the petitioner says an accident befell him, and December 29th, when he testified for himself in the proceeding in the Bureau, he received treatment or sought it.

The petitioner swore that the night supervisor knew of the accident at the moment of its occurrence, that it happened in'his presence, and immediately amended this statement by saying that “he was there after it happened.’’ His witness, Goldstein, gave him no support on this feature of his case. The night supervisor testified that he neither witnessed nor heard of the accident. Goldstein said that he had spoken to no one of the accident, but that following an established custum in minor accidents he made a note of it on a pad, detached the slip on which he had written, and placed ?t in a medicine cabinet, from which, in due course, it would have come to the notice of respondent. The respondent says the note never came to respondent’s notice, and it may justly be inferred that Goldstein (who considered the accident so trivial that the petitioner said Goldstein told him that petitioner would be foolish to go home) made no note of it. The petitioner said that he continued in respondent’s employ, without losing any time, for several days after his injury, and Goldstein vaguely or cautiously corroborated him.

James Latona, whose helper the petitioner then was, and who worked in close proximity to the petitioner — “approximately about ten feet away” — learned nothing of the alleged accident, and said that although he saw the petitioner on the morning of May 13th, he did not see him on the night of that day nor at all on May 14th. ISTo inquiry was made of this witness as to whether he ever saw him after May 14th, but his recollection was that the petitioner had quit his employment on the 18th. Whether then or a little later he quit, and quit not as he testified, because his work was heavy and there were no light jobs in respondent’s shop (light jobs there were, his testimony notwithstanding), but because more remunerative work lured him elsewhere is a question.

Leonard Ledered, the general superintendent, said that he talked to the petitioner and inquired of him why he was leaving, and that the petitioner replied that he did not wish to work at night and could make more money elsewhere. The petitioner said that he received, exclusive of overtime, only $28 a week from the respondent; that on leaving his employment he took almost at once a course at a welding school, and on completing it obtained immediate employment at his new trade, from which he averaged $50 a week, and that on December 29th, 1943, having meanwhile moved into still another employment as a welder, he was earning $78 and $89 weekly.

The fact of the alleged accident has not been satisfactorily established. The record does not disclose the number of workers on the night shift at respondent’s plant on May 12th-13th. Whatever their number, only two — the petitioner and Morris Goldstein — spoke of the alleged mishap; and the petitioner, himself discredited, if not much aided, in my judgment, by his witness.

It is not improper to observe (Gilbert v. Gilbert, 122 N. J. L. 533; 6 Atl. Rep. (2d) 213) that the Deputy Compensation Commissioner, by whom the matter was heard in the Bureau, and who had opportunity and advantage for determining the value of the evidence not shared by me, reached the like conclusion. "I have observed,” he wrote in his determination of facts on file, "the attitude and demeanor of the petitioner and his witness on the stand— and I did not place much credit in the story of the petitioner — the story of the petitioner’s witness did not impress the court either.”

If an accident occurred, the conviction is inescapable that it was without harmful consequences to the petitioner. Dr. Yolken quoted, without objection, Dr. Salzman, to whom the petitioner was sent for X-rays, as concluding from his study of the pictures, that the petitioner’s trouble was-"arthritic in origin.” Dr-. Ruoff found no objective sign of any ailment or disorder whatever. The petitioner’s own conduct throughout seven and a half-months, that is, from May 13th, when the accident is claimed to have occurred, until December 29th, when he testified in his own behalf, is a refutation of his claim.

In this view of the matter, it is unnecessary to resolve the third question arising- from the record.

The judgment of'the Workmen’s Compensation Bureau is affirmed.


author: Mascucci, D. C. J.

text:
    District Court of the Second Judicial District of the County of Essex.
    JOHN A. STORCH, PLAINTIFF, v. ANGELO APOSTOLIS, DEFENDANT.
    Decided October 5, 1944.
   Mascucci, D. C. J.

The plaintiff, as landlord, has entered this proceeding to dispossess the deiendant as his tenant from premises occupied by the said tenant for dwelling purposes on the third floor of 423 Springfield Avenue in Newark. The defendant appears specially and challenges the jurisdiction of the court on the ground that the premises are used for dwelling purposes and are not situated in the Second Judicial District of Essex County, but are, in fact, situated iu the City of Newark, which has two District Courts. He cites as his authority R. S. 2:8-39; N. J. S. A. 2:8-39.

Two questions are to be decided to ascertain whether the court has jurisdiction in the matter. First, whether there is any statutory limitation requiring a summary tenancy proceeding to he started within certain territorial limits within the County of Essex and, second, if so, whether the premises in question are situated within said territorial limits.

On the first question some confusion is caused because of two statutory provisions on the subject which appear to be inconsistent with each other, but, in fact, are not and are readily distinguishable.

The 1937 R. S. 2:58-17; N. J. S. A. 2:58-17, provides that any tenant may be removed by appropriate proceedings in “any district court in the county where such premises are situated,” &c. However, this provision is silent on the character of the tenancy referred to.

R. S. 2:8-39; N. J. S. A. 2:8-39, of said statutes, provides that no proceedings to “recover the possession of premises used for dwelling purposes and situate within a city or judicial district in which a district court exists, shall be brought except in a district court in the city or judicial district in which the premises are situate,” &e.

It can be easily seen that the latter provision specifically applies to dwelling, while the former applies generally to all tenancies. Specific legislation on a specific, distinguished and classified subject must be considered as applicable and controlling as .against legislation relative to the broader, general subject-matter.

I, therefore, conclude that said suit involving a dwelling must be brought in the city or judicial district in which the premises are situate.

The second question of whether the premises are within the judicial district involves a construction of the statutes defining the territorial limits of this court.

An inspection of the statute defining the territory contained in the Second Judicial District of Essex County (R. S. 2:8-4; N. J. S. A. 2:8-4) provides that “the following enumerated acts, incorporating county judicial districts in the various counties of this state, are saved from repeal.” After reciting the acts applicable thereto the revisors have added this comment: “This district comprises the town of Irvington; the townships of Millbum and South Orange.” This comment is misleading, for there is now no municipality known as the Township of South Orange.

The original act incorporating the District Court included the Town of Irvington, the Village of South Orange, the Township of South Orange in the County of Essex and the Township of Millburn (Pamph. L. 1919, ch. 90, p. 198; N. J. S. A. 2:8-4, 2:8-5). Subsequently this act was amended (Pamph. L. 1921, ch. 343, p. 940; N. J. S. A. 2:8-4, 2:8-5), and provides that after April 12th, 1921, the district would include the Town of Irvington, the Township of South Orange in the County of Essex, and the Township of Mill-burn. There were at that time two municipalities in Essex called South Orange, one of which was a village and one of which was a township, and the legislature clearly indicated that it wished to take the village out and leave the township in the judicial district. Probably the proximity of the two adjoining municipalities together with the similarity of the names, was causing some confusion and on November 15th, 1922, the municipality known as “The Township of South 'Orange in the County of Essex,” changed its name to “The Township of Maplewood” (Pamph. L. 1923, p. 591). While the record of this change of name appears in the Pamphlet Laws of the year 1923, they were not included in the index, and for that reason, not ordinarily found by the lawyers. The statutes of 1919 and 1921 having been “saved from repeal,” I must conclude that the Township of Maplewood is a part of the judicial district.

Premises in question not being in this judicial district or in a municipality contributing to the maintenance of a District Court, but, being in the City of Newark, this court is without jurisdiction, and the proceeding is dismissed.


author: Kingfield, D. C. J.

text:
    District Court of the First Judicial District of the County of Warren.
    ROY D. KEEHN, AS RECEIVER OF CENTRAL MUTUAL INSURANCE COMPANY OF CHICAGO, PLAINTIFF, v. CLARENCE K. LAUBACH AND WILLIAM BUCHECKER, INDIVIDUALLY AND DOING BUSINESS UNDER THE NAME AND STYLE OF LAUBACH TRANSPORTATION. CO., DEFENDANTS.
    Decided September 15, 1944.
    For the plaintiff, Samuel M. Hollander.

    For the defendants, Lewis S. Beers.

   Kingfield, D. C. J.

The facts in this ease were stipulated as follows: A broker solicited an application for a. policy of insurance covering the defendant’s trucks. An. application was forwarded to the company at its North: Carolina office, in which state the company was admitted to do business; and the policy was issued to the defendant who received the same. Subsequently in Illinois, the state of its incorporation, liquidation proceedings were instituted, wherein the defendant was served by publication; and a judgment was entered in that state requiring the defendant to pay an assessment. A demand for payment of the assessment was made; and thereafter this suit based upon the Illinois judgment was started. The defendant was a resident of New Jersey and the home terminal of his trucks, which were covered by the policy of insurance, was within the State of New Jersey, although the trucks were used in both intrastate and interstate commerce. The solicitation took place within New Jersey. The broker was not a registered agent of the insurance company, and furthermore the insurance company did not comply with the laws of this state in order' to do business within the state.

The defendant contends that the plaintiff should not recover, and relies upon the case of Cunningham v. Brochway Fast Motor Freight, Inc., 18 N. J. Mis. R. 101, wherein it was held that if a foreign mutual insurance company has solicited business from New Jersey residents on property located in New Jersey contrary to the New Jersey criminal laws, our courts will not permit a suit against such policy holders to collect an assessment imposed after insolvency of the foreign company.

The pertinent New Jersey statutes are R. S. 17:17-12 which makes it a misdemeanor to solicit, negotiate, or effect any contract of insurance without being authorized to do-business in New Jersey, and B. S. 17:32-10 which provides that no insurance company not incorporated under the laws of this state, doing business on the mutual plan, shall recover in an action in any court in this state upon any policy of insurance upon property in this state which has been or may be hereafter issued by the company, for any assessment made upon the policy unless it has previous to the issuance of the policy of insurance complied with the provision of this subtitle.

The plaintiff contends since his action is predicated upon the judgment of assessment of a sister state, it is a judgment which must be accorded full faith and credit. The assessment has been sustained by the Illinois Appellate Court in People, ex rel. Palmer, &c., v. Central Mutual, 313 Ill. App. 84. It cannot be disputed that the validity of the assessment made in connection with the liquidation of an insolvent insurance company is governed by the laws of the state where the corporation has its domicile. Broderick v. Rosner, 294 U. S. 629.

The question in this case is simply whether the last mentioned statute bars the suit to collect the assessment levied against the defendant. It is my opinion that it does.

The distinction between this case and the Cunningham case is not material; even though this suit was upon a foreign judgment, its purpose, nevertheless, was to collect an assessment, as in the Cunningham case. In both the North Carolina case, Miller v. Barnwell Bros., 137 Fed. Rep. (2d) 257, and the Georgia case, Gaston v. Keehn, 26 S. E. Rep. (2d) 107, involving suits upon similar assessments, the insurance company had qualified to do business in those states, thus differentiating these cases from the present one. The contention that a state cannot forbid insurance contracts relating to risks within its limits from being made between a citizen and a corporation in another state, as held in Allgeyer v. Louisiana, 165 U. S. 578, is not the point of issue in this case. As was held in Bothwell v. Buckbee Mears Co., 275 Id. 274, a case similar to this one, there is involved here the doing of something in New Jersey, which, its law prohibited.

It is true that recently, the United States Supreme Court placed insurance in the category of interstate commerce. United States v. South Eastern Underwriters Association, 64 Sup. Ct. Rep. 1162. Yet in the absence of complete federal regulation of insurance, I cannot bring myself te believe that a state does not have the right to protect its citizens by the passage of laws such as R. S. 17:32-10, and the further setting up of qualifications requisite for a foreign insurance company to do business within its borders.

While the broker who solicited -the insurance policy was not a registered agent of the company, the policy was issued as a direct result of his solicitation, it necessarily follows that he was acting for the company in soliciting this insurance policy. ISTew Jersey law forbids such solicitation unless the insurance company is authorized to do business within the state, and further denies the company the right to collect assessments arising out of such solicitation of insurance upon property in ISTew Jersey. In this case, the property was in ISTew Jersey, and the fact that it was also used in interstate commerce does not make any material difference.

Where an insurance contract though validly made in another state, is in direct contravention of New Jersey law, it is void so far as concerns the right of the foreign principal to sue upon it. Other state courts have arrived at a similar result. Stevens v. Rasin Fertilizer Co., 87 Md. 679; 41 Atl. Rep. 116; Swing v. Munson, 191 Pa. 582; 43 Atl. Rep. 342; Employers Mutual Insurance and Service Co. v. Pakradooni, 84 Pa. Superior Ct. 532; Swing v. Thomas, 120 Ill. App. 235. Cases have also been decided in Ohio, Indiana, Mississippi, South Carolina and Wisconsin to the same effect, while ISTew York and Khode Island cases have permitted recovery. The weight of authority seems to be against recovery. Judgment in this case is entered for the defendant.


author: Burling, C. C. J.

text:
    JOHN S. STEELMAN, PLAINTIFF, v. CAMDEN TRUST COMPANY, SUCCESSOR BY MERGER TO CAMDEN SAFE DEPOSIT AND TRUST COMPANY, TRUSTEE UNDER THE WILL OF JOSHUA E. BORTON, DECEASED, DEFENDANT.
    Decided September 29, 1944.
    For the plaintiff, Vincent S. Haneman.

    For the defendant, Robert Peacock and French, Richards & Bradley.

   Burling, C. C. J.

This is an action at law cast in contract, to recover an amount alleged by the plaintiff to be due him from the defendant under the terms of an agreement dated the 1st day of September, 1937, between Camden Safe Deposit and Trust Company, trustee under the will of Joshua E. Borton, deceased, and the plaintiff. As a result of merger proceedings, the Camden Safe Deposit and Trust Company assumed the name of Camden Trust Company It has been submitted to and tried before me, sitting without a jury, at the Atlantic County Circuit and submitted to the court on a stipulation to that effect and a stipulation of facts.

The defendant was the owner of a bond and mortgage made by Nellie C. Becht to Hampton Brothers Company, dated March 21st, 1924, covering property in Yentnor City, Atlantic County, New Jersey, which mortgage was recorded in the clerk’s office of Atlantic County in Book 294 of Mortgages, page 216, and upon which there was due the principal sum of $20,000 with interest thereon from September 21st, 1936, less the sum of $350 paid on account thereof. Foreclosure proceedings had been instituted by the defendant upon said mortgage and thereafter the plaintiff acquired title to the premises. Under such circumstances the agreement herein-before referred to was executed.

The draft of the agreement lacks refinement and fails to expressly anticipate probable situations. The primary intent of the parties as evident in the writing was to establish a salutary, workable plan for the management of the recently acquired real estate of the plaintiff upon which improvements were erected and to stabilize the mortgage of the defendant. Certain repairs and alterations ($1,500 in amount) were required in order to induce a favorable income from letting. In addition there were delinquent taxes of approximately $5,121.60 due the municipality to be paid on so-called five year plan, thus sixty monthly payments at $85.36 per month.

The agreement contemplated the execution of a lease by the plaintiff to Standard Brands, Inc., for a period of five years at a monthly rental of $175, with an additional five year option if the Standard Brands, Inc., so desired, and the increment from the lease was to be assigned to the defendant for the purposes set forth in the agreement. The time for the payment of the bond and mortgage was extended for a period of five years from September 1st, 1937. The plaintiff was to pay the delinquent taxes due to the municipality under a five year plan. A sum not to exceed $1,500 was to be expended by the plaintiff for repairs and alterations to the premises.

The rent was to be distributed in the following manner:

1— To refund to the plaintiff the cost of repairs at the rate of $75 per month, and thereafter to refund to the plaintiff the money paid for delinquent taxes under the five year plan at the rate of $75 per month.

2— The remaining $100 per month of the rent was to be distributed by the defendant in the following fashion:

(a) to the payment by it of current taxes due the municipality

(b) payment of interest due on the mortgage debt at the rate of 4% per annum

(c) payment of costs and counsel fee in the pending ejectment suit and foreclosure suit, and

(d) any surplus to be applied on account of the principal of the debt.

The plaintiff seeks to recover $600 remaining unpaid of the cost of repairs and the sum of $134.61 paid on account of the delinquent taxes. The defendant denies such right and defends upon the ground that the plaintiff failed to perform his obligation under the agreement, more particularly the payment of the delinquent taxes on the five year plan and is barred from recovery. The plaintiff contends that the provision, for the refund of the cost of the repairs and delinquent taxes is a divisible and separate covenant and this determination is the crux of the controversy.

The primary rule in the construction of contracts is that the court must, if possible, ascertain and give effect to the mutual intention of the parties as of the time the contract was made. 17 C. J. S., Contracts, 689, § 295; Basic Iron Ore Co. v. Dahlke (Court of Errors and Appeals, 1927), 103 N. J. L. 635 (at p. 638); 137 Atl. Rep. 423; Clott v. Prudential Insurance Company of America (Supreme Court, 1934), 114 N. J. L. 18 (at p. 21); 175 Atl. Rep. 203; affirmed, 115 N. J. L. 114; 178 Atl. Rep. 747; Corn Ex change Bank v. Taubel (Court of Errors and Appeals, 1934), 113 N. J. L. 605 (at p. 608); 175 Atl. Rep. 55.

In the construction of a contract it is necessary to ascertain what the parties thereto meant, intended and understood as determined by the words employed, and as an aid in this respect, the object of the parties in making it may be taken into consideration. Kelly v. Guarantee Trust Co. (Court of Errors and Appeals, 1933), 114 N. J. Eq. 110 (at p. 115); 168 Atl. Rep. 413.

In Dixon v. Smyth Sales Corp. (Court of Errors and Appeals, 1933), 110 N. J. L. 459 (at p. 460); 166 Atl. Rep. 103 (at p. 104), it was held:

“In construing contracts, the essential question is to ascertain the intention of the parties. This rule, therefore, necessarily applies in ascertaining whether a contract is divisible or entire. Orenstein v. Kahn, 13 Del. Ch. 376; 119 Atl. Rep. 444; Shinn v. Bodine, 60 Pa. 182; Bamberger Bros. v. Burrows, 145 Iowa 441, 453; 124 N. W. Rep. 333; Barlow Manufacturing Co. v. Stone, 200 Mass. 158; 86 N. E. Rep. 306; Pierson v. Crooks, 115 N. Y. 539; 22 N. E. Rep. 349. If there be a single assent to a whole transaction involving several things or several kinds of property a contract is always entire; but if there be a separate assent to each of the several things involved, it is divisible. Although the consideration is apportioned on the face of a contract, yet if there be a special agreement to take the whole or nothing, or if the evidence clearly shows that such was the purpose of the parties, the contract would be entire. Orenstein v. Kahn, supra; Dolan v. Lifsey, 19 Ga. App. 518; 91 S. E. Rep. 913; Thompson v. Fesler, 74 Ind. App. 80; 123 N. E. Rep. 188; Traiman v. Rappaport, 41 Fed. Rep. (2d) 336; Wagner v. G. Gaudig & Blum Corp. 223 App. Div. 254; 228 N. Y. S. 139.”

In ease of doubt covenants will generally be construed as dependent rather than as independent, since such a construction ordinarily prevents one party from having the benefit of the contract without performance of his own obligations. 17 C. J. S., Contracts, 799, § 344.

The plaintiff overlooks the intent and purpose of the agreement from an overall observation. To obtain the aforesaid objective the program was intended to be entire and thereby be in the mutual interest of both parties.

The letting at $175 per month for five years and the future acquisitions of the rent for disposition by it plus the activity of the new owner, influenced the mortgagee to discontinue the foreclosure proceedings for existing default of the former owner and extend the time of payment of principal of mortgage for five years.

From $1,200 per year of the rent, the mortgagee was to pay current municipal taxes and retain interest on the debt at 4% or $800 per year and legal fees and costs of the suit to be discontinued. The current taxes, being a prior lien to the mortgage, would be required to be paid by the mortgagee from the first money received and after paying them sufficient would not remain to entirely pay the delinquent mortgage interest of $450 and current mortgage interest of $800 and current taxes during the first year. Thus it was mathematically and obviously apparent to all concerned that the owner must after making the repairs costing $1,500 protect that and his other investment in the property by paying promptly and in accordance with schedule from his own funds the delinquent taxes at the rate of $85.36 per month to ward off proceedings by the municipality which had a prior position to all concerned. This he failed to do. He delayed until December 9th, 1937, and then paid the sum of $134.61 which carried the program of the so-called five year plan only to November 1st, 1937. None was paid thereafter. Thus jeopardizing the investments of all concerned including the lessee. Foreclosure proceedings were instituted by the defendant and discontinued for reasons undisclosed in the stipulation of fact; and so the intent of the agreement by the rule of the subsequent conduct of the parties cannot be inferred therefrom. The subject of subsequent encumbrance was not anticipated or dealt with in the agreement. For 'reasons also undisclosed in the stipulation of facts a second mortgage was foreclosed and through the resulting sale, the plaintiff lost his title December 28th, 1938, to the premises.

There did exist an important and material breach by the plaintiff, namely to pay the delinquent taxes promptly.

The jeopardy thus created by the plaintiff warranted the mortgagee in withholding payments for refund of costs of repairs. The entire rent (60 months times $150 per month or $9,000) was not sufficient to pay the delinquent taxes ($5,121.60 less $134.61), current taxes and the mortgage interest at the rate of 4% per annum. There is no proof that the delinquent taxes were otherwise paid. The weakness of the plaintiff’s position is such that he could thereby have made the repairs and thereafter sold the property and receive a consideration therefor and demanded his refund from future rents and disregarded his covenant to pay the delinquent taxes. Thereby defeating a very obvious intent of the program for stabilizing the situation without requiring the mortgagee to advance its funds in order to protect its interest and the solution o£ the troirble from the fruits of the contract with the lessee as they were paid by the lessee over a five year period.

In ascertaining and giving effect to the intention of the parties as manifested by the language employed and objects sought to be accomplished, the fair and reasonable interpretation of the contract is that it is entire. Failure of complete performance by the plaintiff defeats his right to recover. 17 C. J. S., Contracts, 935, § 454.

I find the facts to be as stated in the stipulation.

After consideration of the facts and the law applicable thereto and arguments of counsel, the court finds no cause for action.


text:
    Cape May County Circuit Court.
    OLIVE L. FREAS, PLAINTIFF, v. LEON W. SCOTT, DEFENDANT.
    Decided September 20, 1944.
    For the plaintiff, Lewis T. Stevens.

    For the defendant, T. Millet Hand.

   Burling, C. C. J.

Motion has been made to strike out the complaint, pursuant to R. S. 2:27-125; N. J. S. A. 2:27-125, and Supreme Court rules 40 and 80 to 85, inclusive; N. J. S. A. tit. 2, by the defendant.

The attack is two-fold, namely — one, that the complaint is frivolous or insufficient in law, and two, it is sham.

Upon submission of said motion, affidavits in support of the motion^were presented by the defendant, but no affidavit in contravention thereof was presented by the plaintiff.

Upon the adjourned return day of the hearing upon said motion, oral argument was made by the defendant and written brief submitted by him. Further adjournment of the motion was made by formal order to August 25th, 1944, with leave to afford further opportunity to the plaintiff to file answering affidavit or affidavits and present oral argument and written brief in opposition to the motion. No affidavit was filed nor was an appearance made for the purpose of oral argument nor has written brief been presented by the plaintiff, and the court having been advised by the attorney for the plaintiff that it was not intended to file any jiapers in relation to the motion, pursuit is now made to the disposition of the matter accordingly.

The complaint alleges that on the 18th day of September, 1943, in the City of Cape May, New Jersey, the plaintiff delivered to the defendant the sum of $500 on account of the purchase price of $2,000 of certain lands and premises at the southwest corner of Madison and Corgie Streets, in the City of Cape May, New Jersey, and received his receipt therefor. Demand is made for the payment of the sum of $500 with interest, on circumstances alleged in the complaint as follows:

“1. On September 8th, 1943, at City of Cape May, on representation of the defendant, that he was the owner of certain land and premises at the southwesterly comer of Madison Avenue and Corgie Street, in said City of Cape May, delivered to defendant the sum of Five Hundred Dollars.

“3. The said land and premises at said time was the property of Merchants National Bank of Cape May, N. J., a banking corporation of the United States of America.

"4. Defendant at the time of receiving the Dive Hundred Dollars from Plaintiff, was not even an equitable owner of the said lands and premises, and had not any agreement with the said Merchants National Bank to purchase the said lands and premises, and had not made any payment to said Merchants National Bank, and, therefore, could not legally enter into any agreement with the plaintiff, nor any other person, to sell them the said land and premises.”

The undisputed facts appear to be:

On the 17th day of September, 1943, the plaintiff attended an auction sale on and affecting the premises in question which was conducted by John S. Townsend, auctioneer. Among those persons present were the plaintiff and the defendant. The plaintiff was an active bidder. The high bid of the defendant of $1,500 for the premises was accepted by the auctioneer and check of the defendant to the order of the auctioneer in the amount of $500 was given by him and accepted by the auctioneer on account of the purchase price. The following day the plaintiff sought the defendant and offered to purchase the premises for the sum of $2,000 which offer was accepted by the defendant, and a deposit in cash in the amount of $500 was made by the plaintiff to the defendant.

The defendant obtained title by deed from the principal of the auctioneer, the Merchants National Bank, of Cape May, New Jersey, dated October 22d, 1943, which was recorded in the office of the clerk of Cape May County in Book 650 of Deeds, page 6. No allegation in the complaint is made of the refusal or failure of the defendant to convey title in accordance with the agreement between the plaintiff and defendant, the sole right to recover being based on the aforesaid allegations in the complaint.

A contract of sale may be valid and enforced if made in good faith by the vendor, notwithstanding the subject-matter is realty to which the vendor at the time of entering the contract has no title, at least where he is so situated as to be able to convey at the proper time, or where the vendee is acquainted with the facts or has not been induced to purchase through concealment or misrepresentations. 66 C. J. 511. Capacity to make a valid contract of sale is not dependent on the holding of absolute title to the lands and such a contract may be valid and enforced, if made in good faith, and without fraud or imposition practiced upon the vendee. Roselle Park Building and Loan Association v. Friedlander (Supreme Court, 1935), 116 N. J. L. 32 (at p. 35); 181 Atl. Rep. 316.

The falsity of material allegations of the complaint is apparent. To this extent the complaint is sham as the facts in the supporting affidavits of the defendant are not controverted by affidavit of the plaintiff, Louis Kamm, Inc., v. Flink (Court of Errors and Appeals, 1934), 113 N. J. L. 582 (at p. 596); 175 Atl. Rep. 62. Despite the circumscribing limitations to strike as sham (Louis Kamm, Inc., v. Flink, ante) the complaint must fall. Upon challenge of the facts and demonstration thereof to be without factual support by a defendant by competent proof (legal and sufficient) of any of material elements of plaintiff’s cause of action, the obligation to support the cause of action to the extent of presenting facts to raise the issue or dispute upon such material elements of his legal theory of his cause of action rests with the plaintiff and he is obliged to do so by competent affidavit or affidavits, if such proof is available.

Further the complaint is deficient in that the rule as to pleading and proof in actions for deceit has been tersely stated to be that the plaintiff must allege with reasonable certainty and be prepared to prove: (1) that the defendant made some representation to the plaintiff meaning that he should act upon it; (2) that such representation was false and that the defendant, when he made it, knew it to be false; (3) and that the plaintiff, believing such representation to be true, acted upon it and was thereby injured. Plimpton v. Friedberg (Court of Errors and Appeals, 1933), 110 N. J. L. 427 (at p. 428); 166 Atl. Rep. 295.

The motion to strike out the answer is granted with resulting judgment for the defendant and costs. Appropriate rule may be presented.


text:
    Atlantic County Circuit Court.
    LOUIS KATIN AND ROSE STEIN, PLAINTIFFS, v. MIRIAM M. CRISPEL, DEFENDANT.
    Decided September 14, 1944.

      For the plaintiffs, Blumberg & Blumberg (by Irving I. Jacobs).

    For the defendant, Harry N. Tonkins.

   Burling, C. C. J.

Motion has been made before me, pursuant to R. S. 2:27-124; N. J. S. A. 2:27-124, and Supreme Court rules 40 and 80 to 84; N. J. S. A. tit. 2, to strike out paragraphs 2 and 3 of the answer of the defendant upon the following grounds:

“1. Said answer is sham in part, and in support thereof, we will use the annexed affidavits and will exhibit the original of the contract, upon which this suit is based.

“2. Said answer is frivolous in part, in alleging that a conveyance without the joinder of the defendant’s husband, is not a breach of the defendant’s covenant in said agreement contained, to convey free of encumbrance.”

Upon submission of the said motion, affidavits in support of the motion were presented by the plaintiffs and no affidavit in contravention thereof was presented by the defendant. By stipulation of the parties, the agreement in writing under seal, referred to in the complaint was presented and received as Exhibit P-1. Oral argument has been had and written-briefs submitted.

At common law, a defendant having entered into an agreement in writing under seal, a breach thereof and resulting damages gave rise to an action styled “covenant.” It was the peculiar remedy for the non-performance of a contract under seal, where the damages were unliquidated and depended in amount upon the opinion of the jury. Chitty on Pleading 118.

The plaintiffs contend that the format of their action is proper. Under the formulating system of pleading at common law, their action would be styled “covenant.” Prior to the Practice Act of 1912, two principal categories of actions were provided in personal actions, 1 — actions upon contract, and 2 — actions ex delicto. The act of the legislature in 1912, chapter 231, paragraph 3; N.J. S. A. 2:2 7-7, re-styled the names of actions at law by providing that there should be one form of civil actions in the courts of law, denominated “action at law.” The change abrogated the names of the former classifications, but it did not destroy the value of classification nor eliminate the averments requisite to a good count or the facts to be proved in support of them. Ward v. Huff (Supreme Court, 1919), 94 N. J. L. 81; 109 Atl. Rep. 287.

The purpose of pleading is to lead to the formation and presentment 6f an issue on the question in dispute between the parties. It is important that the issues to be tried be simplified and the parties be informed with particularity of the matter to be presented. Buermann v. Morris (Supreme Court, 1930), 8 N. J. Mis. R. 811; 152 Atl. Rep. 341. The issue in this matter is the right of the palintiffs to consequential damages.

The complaint avers a contract under seal, proffer thereof, the breach and resulting damages. The executed agreement is not set forth in the complaint nor incorporated by annexation thereto. The specific breach, the failure to deliver a special warranty deed free of all. incumbrances, except as otherwise set forth in the agreement is not pleaded.

The defendant admits the agreement in writing under seal between the parties was executed for the sale of improved land and certain furniture contained in the building erected thereon, and alleges at the time of the prescribed settlement, the deed of the vendor was proffered. The vendor was married but her husband refused to sign the deed. The vendees .allege they were ready and tendered performance. The .answer neither admits nor denies the tender due to the alleged lack of sufficient knowledge to form a belief. To this extent the answer is sham as the facts in supporting affidavits of the plaintiffs upon this matter are net controverted by affidavit of the defendant. Louis Kamm, Inc., v. Flink (Court of Errors and Appeals, 1934), 113 N. J. L. 582 (at p. 596); 175 Atl. Rep. 62.

In this state of affairs the plaintiffs contend that the -defense alleged in the second sentence of the second paragraph is frivolous and should be stricken, and that the remaining issue is then solely one of the measure of damages. In this contention there is merit. Ho point or defense is raised that the tendered deed would convey a fee-simple without encumbrances. From the answer, it is a justified inference that the provisions of R. S. 3:37-2; N. J. S. A. 3:37-2, were applicable, Atl v. Kwiatek (Court of Chancery, 1941), 128 N. J. Eq. 469; 17 Atl. Rep. (2d) 161. Or if not, there was issue born and common law curtesy effective. An outstanding interest by curtesy violates a covenant against all encumbrances. Bondarchuck v. Barber (Court of Chancery, 1944), 135 N. J. Eq. 334 (at p. 335); 38 Atl. Rep. (2d) 872; Saldutti v. Flynn (Court of Chancery, 1906); 72 N. J. Eq. 157; 65 Atl. Rep. 246; Carter v. Executors of Denman (Supreme Court, 1852), 23 N. J. L. 260; R. S. 37:2-16; N. J. S. A. 37:2-16. The second paragraph of the answer will be accordingly stricken.

Thus the real issue is still not simplified. Upon the face of the complaint in a proceeding for assessment will not appear the nature of the breach to determine the damages within the formula laid down in Gerbert v. Trustees (Court of Errors and Appeals, 1896), 59 N. J. L. 160 (at p. 163); 35 Atl. Rep. 1121; Elwood v. Smith (Supreme Court, 1927), 104 N. J. L. 248 (at p. 249); 139 Atl. Rep. 900; affirmed (Court of Errors and Appeals, 1928), 105 N. J. L. 236; 143 Atl. Rep. 916; Rabinowitz v. Debow (Court of Errors and Appeals, 1927), 104 N. J. L. 62 (at p. 64); 138 Atl. Rep. 891; R. S. 2:45-1; N. J. S. A. 2:45-1. To that extent paragraph four of the complaint was subject to demurrer. The rules of pleading require the pleader to aver either the facts which constitute his claim or set forth the circumstances from which those facts necessarily by intendment of law result. Taylor v. New Jersey Title, &c. (Supreme Court, 1903), 70 N. J. L. 24 (at p. 26); 56 Atl. Rep. 152.

The object of pleading is not to defeat but to advance the ends of justice, not to destroy but to protect the substantial rights of the parties. Lully v. National Surety Co. (Court of Errors and Appeals, 1929), 106 N. J. L. 81 (at p. 83); 148 Atl. Rep. 762. The policy of modern law in this state has been to strive for a hearing and decision on the merits 'and to subordinate matters of form not affecting the merits. Cammarata v. Public Service, &c., Transport, 124 N. J. L. 38 (at p. 41); 11 Atl. Rep. (2d) 253. Leave will be given to the defendant to make a motion addressed to the complaint in the nature of a demurrer .to strike out paragraph 4 of the complaint, relating to consequential damages and further for the purpose of expedition leave to the plaintiffs in the interim to amend the complaint so as to allege such facts which constitute the gist, the elements which create their right, to consequential damages and in that instance leave to the defendant will be given to file amended answer or to make appropriate motion to the amended complaint.

Appropriate rule may be presented.


text:
    District Court of the First Judicial District of the County of Warren.
    I. LEHR BRISBIN, ATTORNEY IN FACT FOR GIRARD INVESTMENT COMPANY, PLAINTIFF, v. ANDREW AND JULIA BOGOLY, HUSBAND AND WIFE, DEFENDANTS.
    Decided October 26, 1944.
    For the plaintiff, John H. Pursel.

    For the defendants, Berlins Meade.

   Kingfield, D. C. J.

The facts in this case are as follows: A printed form note, (known as a married woman’s judgment note guaranteed by her husband) was executed in the State of Pennsylvania by Julia Bogoly and Andrew Bogoly, who signed their names at the bottom of the note to the left of letters “L. S.” To the left of the signatures, a witness signed his name beneath the words “Signed in the presence of.” The last paragraph of the note contained the following clause: “that at the time of signing and sealing this paper she received the money on said loan.” There is due on the note the sum of $291. If the note is not a sealed instrument, the defense of the statute of limitations would be good since the note was executed about nine years ago. The attorneys have stipulated that the only question to be decided is whether the note is a sealed instrument under the laws of the State of Pennsylvania, and have submitted written briefs in the matter.

In Appeal of Hacker, 121 Pa. 192; 15 Atl. Rep. 500, the court held: “Whether the instrument is under seal or not is a question to be determined by the court upon inspection; and whether or not any mark' * * * shall be held to be a seal depends wholly upon the intention of the party executing the instrument as exhibited on the face of the paper itself.” In that ease there was a testimonium clause and the court held a mere dash of the pen right after the name to be a seal. In the recent case of Collins v. Tracy Grill and Bar Corp., 144 Pa. Super. 440; 19 Atl. Rep. (2d) 617, decided by the .Pennsylvania Superior Court in 1941, the court stated that writing the word “Seal” or the letters “L. S.” after the signature or signing opposite these or similar devices on the printed form, characterizes the writing as a sealed instrument. In Hazleton National Bank v. Kintz, 24 Pa. Super. 456, and in Bowman v. Robb, 6 Pa. 302, the letters “L. S.” had the effect of a seal. In Loraw v. Nissley, 156 Pa. 329; 27 Atl. Rep. 242, the court held that a person by signing his name to the left of the printed word “Seal” is ample evidence that he adopted the act of the printer who put it there for a seal. The court further stated that the use of a note in a printed form with blank spaces to be filled in raises a conclusive presumption that all parts of it were adopted by the signer except such as were clearly struck out. This case also states, that the decision in the ease of Bennett v. Allen, 10 Pa. County Court Reports 256, wherein the letters “L. S.” were held not to be a seal, and upon which case the defendants strongly relied, to be contrary to the settled trend of Pennsylvania cases and that it cannot be approved. In Corlies v. VanNote, 16 N. J. L. 324, the Supreme Court cited two Pennsylvania cases: Long v. Ramsay, 1 Serg. & Rawle 72, and Taylor v. Glaser, 2 Id. 502, which held that it is not necessary that sealing and delivery be mentioned in the writing. In McClellan v. F. A. North Co., 14 N. J. Mis. R. 760; 187 Atl. Rep. 337; affirmed by the Court of Errors and Appeals in 118 N. J. L. 168; 191 Atl. Rep. 753, which involved. a Pennsylvania contract with the letters “L. S.” following the signatures, the instrument was held to be a sealed instrument. -

Applying the law to the facts at hand, it is my opinion that the instrument in question upon inspection is a sealed instrument. While the words “Witness my hand and seal” or “Sealed and delivered in the presence of” do not appear in the note, the words “signing and sealing” actually appear in the last paragraph of the note and the meaning of this clause is clear and is sufficient to take the place of the usual attestation clause. Even though the usual testimonium clause does not appear, yet where there is a distinct reference in the note of signing and sealing followed by a signature to the left of the printed letters “L. S.,” that this is sufficient evidence that the makers adopted the act of the printer in putting the letters “L. S.” upon the note for a seal. Judgment will be entered for the plaintiff for $291 against the defendants.