text:
    State Board of Tax Appeals.
    CITY OF JERSEY CITY, PETITIONER, v. J. H. THAYER MARTIN, STATE TAX COMMISSIONER, AND LEHIGH VALLEY RAILROAD COMPANY, CENTRAL RAILROAD COMPANY OF NEW JERSEY, NEW YORK CENTRAL RAILROAD COMPANY, DELAWARE, LACKAWANNA AND WESTERN RAILROAD COMPANY, ERIE RAILROAD COMPANY, NEW YORK, SUSQUEHANNA AND WESTERN RAILROAD COMPANY AND PENNSYLVANIA RAILROAD COMPANY, RESPONDENTS.
    Decided May 26, 1942.

      Tor the City of Jersey City, James A. Hamill (by Framlc P. McCarthy).

    Tor the State Tax Commissioner, David T. Wilentz, Attorney-General (by Duane E. Minará, Charles V. Webb, Jr., and Duane E. Minará, Jr.).

    Tor the respondent railroad companies, Maximilian M. Stallman and Robert J. Bain.

   Quinn, President.

The appeals designated by the foregoing-caption are in the nature of cross-appeals to the petitions of appeal filed by the railroad companies referred to, and others, for the reduction of the assessed valuations fixed by the State Tax Commissioner upon railroad property of all classes, for the year 1939. The city appeals are disposed of herewith. These latter are of course limited to the waterfront railroad terminal properties situated in that taxing district, described' as “second class” property under the Railroad Tax Act (R. S. 54:22-1; N. J. S. A. 54:22-1), in which the city has a peculiar interest, since for the tax year in question such property was taxed at the local rate of taxation certified for the taxing district by the Hudson County Board of Taxation (R. S. 54:22-10; N. J. S. A. 54:22-10), and the entire amount of the tax derived from such property' in the city was allotted and directed to be paid over to it. R. S. 54:24-11; N. J. S. A. 54:24-11.

The particular properties under review in these appeals are the lands and the railroad structures upon them, constituting classification terminals and waterfront rail float and lighterage facilities, known as the Pennsylvania Railroad Terminal, the Claremont Terminal of the Lehigh Yalley Railroad, the Black Tom Terminal of the Lehigh Yalley Railroad, the Central Railroad of 'New Jersey Terminal, the Pennsylvania Railroad Harsimus Goal Terminal, the Erie Railroad Terminal and part of the Delaware. Lackawanna and Western Terminal. It appears that the State Tax Department, for the year 1939, made primary valuations for second class lands and structures, in accordance with its practice of past years, i. e., by the deduction of retired or dismantled structures, the addition of new structures reported by the railroads, and the carrying forward of the valuations of prior years for lands and unimproved structures. It further appears that the Commissioner then made final assessment valuations for the year 1939, by reducing all of the said primary land valuations upon second-class property, horizontally, by 10%, and all of the said valuations upon structures, uniformly, by The gravamen of the Jersey City appeals is that the reductions of both land and structures assessments were arbitrary and unjustifiable, and result in a decrease of the valuations below the true value of the several properties in question. It may be noted that the most recent previous change in second-class land valuations took place in 1936, when there was a similar 10% reduction, to which, however, none of the taxing districts affected took exception by filing appeals.

The action of the State Tax Commissioner, as the assessor, is entitled to the presumption of correctness, United New Jersey Railroad and Canal Co. v. State Board of Taxes and Assessment (Supreme Court, 1926), 103 N. J. L. 33; 134 Atl. Rep. 669, and the problem before us accordingly is as to whether the exhaustive proofs and full arguments upon the law and the facts submitted on behalf of the. city do not . sustain .the burden it carries, and establish the incorrectness of the action of the Commissioner. TJpon thorough consideration of the whole case, we have concluded that they do.

In performing his duties under the Railroad Tax Statutes, R. S. 54:19-1, et seq.; N. J. S. A. 54:19-1, et seq., the State Tax Commissioner is particularly directed, in reference to second-class property, to ascertain the “value * * * in each taxing district in this state, including *. * * waterways, reservoirs, tracks, buildings, water tanks, waterworks, riparian rights, docks, wharves, and piers, and all other real estate, except lands not used for railroad or canal purposes.” R. S. 54:22-1; N. J. S. A. 54:22-1. For the purpose of aiding in the making of sucli valuations, each taxpayer company is directed to return annually to« the commissioner a statement showing, inter alia, the number, character, and value of all buildings and structures in each county and taxing district. R. S. 54:23-l; N. J. S. A. 54:23-l. From these provisions, as well as from the entire statutory scheme for the assessment and distribution of taxes upon railroad property, it is clear that a separate and independent annual evaluation is to be made of each parcel of land and of each structure assessed as second class railroad property. It is thus an obvious corollary that a horizontal percentage reduction in all railroad structures, of whatever condition, age, degree of usefulness, or location, and without any inspection to determine the existence of variables in these respects, is in violation of the statute. Of similar effect, in principle, is a uniform reduction in all waterfront lands, although under conceivable showings of fact, relatively uniform changes in all railroad waterfront property might be justified. The proofs referred to hereinafter will show no such justification in fact as to either structures or land. And concerning the land, no justifiable or reasonable distinction will be seen to have been advanced for the reduction of the highly essential waterfront terminal properties, in contrast to the untouched main-stem lands (Class I property) throughout the state.

A further consideration which must influence the determinations of the board in this matter, in respect to the tax department’s reductions of assessments of the property involved herein, is the fact that the board has decided, in the appeals of the railroad companies for reductions in the valuations fixed by the Commissioner upon all classes of railroad property, including the second-class properties here under review, for the years 1937 and 1938, that such assessments were not in any instance in excess of true values. The Central Railroad of New Jersey et al. v. Martin (State Board, 1941), 19 N. J. Mis. R. 427; 20 Atl. Rep. (2d) 330. No appeal having been filed by the companies from the judgments of the hoard in those cases, the valuations there affirmed,' while not res judicata in the case sub judice, naturally carry a strongly persuasive influence and evoke an inquiry as to what, if anything, has been here adduced to indicate such a difference in the condition of the properties between the assessing dates in the prior cases, January 1st, 1936, and January 1st, 1.937, and that applicable in the present case, January 1st, 19,38, as would explain or warrant the over-all reductions made for 1939. (See City of Hoboken v. Morris and Essex Railroad Co. (State Board, 1941), 19 N. J. Mis. R. 100; 17 Atl. Rep. (2d) 605.) Our search of the record herein discloses no such evidence, but on the contrary indicates affirmatively that there was no basis whatever for downward revisions in 1939. Upon examination by counsel for petitioners as to how the reduction of 10% had been determined as to a specific parcel of waterfront land, Mr. Louis Ifocht, chief engineer in charge of railroad assessments for the Commissioner, stated: “Simply because we felt that the lime had arrived when a reduction should be made.” Why the reduction was to the extent of 10%, and that uniformly upon all railroad waterfront, but not al all as to railroad lands other than waterfront, was not indicated. With respect to the universal reduction of 7%% upon all structures, this was explained by the witness as due to “functional depreciation,'” by which term he intended to connote loss of business by the railroads.

Beference to the testimony given by the witness, Foeht, in the 1937-1938 cases, in which the valuations of the same second-class properties as are here involved were sustained as not in excess of true value, indicates that the State Tax Department did accord the factors of functional depreciation and of prior loss of business and earnings, some weight in the fixing of the valuations for those years. The department does not now contend that insufficient allowance for such factors was made in the 1937 and 1938 assessments, and the contentions of the railroad companies to that effect were specifically overruled by the board, in reliance upon the determinations of all the courts in prior cases, as applied to the voluminous proofs adduced in those cases. A tabulation of tonnage and revenue figures of the major railroad systems for the year 1935, 1936 and 1937, will indicate that the Commissioner could not fairly have relied upon any supposed decrease in 1937 (applicable to the tax year 1939) from the years 1935 and 1936 (applicable to the tax years 1937 and 1938), in substantiation of the “loss of business,” to which the 7%% cut in structure valuations from 1938 to 1939 were ascribed by Mr. Focht. We offer these figures only for the purpose indicated, and are not to be taken as endorsing the view that variations of an entire railroad system in tonnage or revenues in one year or even over a. longer period, are indicative of comparable variations in the valuations of the realty at the most vital and important terminals of such system.

Reading Company
1935 1936 1937
Freight tonnage . . 45,468,359 52,493,387 55,863,566
Operating revenue, $51,373,733 $59,291,758 $58,754,351
The Delaware, Laelcawanna and Western Railroad Co.
Freight tonnage . . 18,569,680 21,307,721 22,064,257
Operating revenue, $44,722,233 $49,728,116 $50,175,004
Erie Railroad Company
Freight tonnage . . 30,597,074 33,559,349 34,786,119
Operating revenue, $66,125,406 $73,937,442 $72,948,019
New Torlc Central Railroad Company
Freight tonnage . . 104,482,468 125,948,268 131,549,445
Operating revenue, $310,192,980 $361,063,872 $366,226,126
Central Railroad Company of New Jersey
Freight tonnage . 22,868,995 25,375,155 27,227,609
Operating revenue, $28,859,339 $31,073,680 $31,816,691
Lehigh Valley Railroad Company
Freight tonnage .... . 23,604,007
Operating revenue, $40,641,557 $49,156,379 $48,618,849

With specific reference to the 10% decrease in the land assessments of these terminal properties, in the face of the maintenance of the prior years’ assessments of main-stem land values, Mr. Focht recognizes the fact to he, and this is conceded by the railroad companies in their brief, that while system tonnage and earnings figures suffered marked trends of variation, principally downward, in the ten-year period preceding the assessing-date for the year 1939, the proportion of the system business which utilizes the Jersey City terminal and transfer facilities has remained fairly constant. Testimony adduced on behalf of petitioner explains the relative constancy of the traffic which is handled by the Jersey City terminals, in that a great quantity of consumer’s goods, such as fruits, vegetables, food stuffs and general consumer’s merchandise, destined for delivery to the general public in the great metropolitan area, goes through the terminals daily, unaffected by economic conditions affecting the quantity of mined and manufactured products carried by the systems generally'.

The unique character and invaluable nature of the waterfront railroad property under appeal would seem to be obvious, in view of the fact that without them most of the major railroad systems serving the Port of New York would be irremediably severed from their most valuable source of business. The New York Custom District handles about one-half of the imports of the entire country and 37% of the exports. For both imports and exports, the terminals here under review constitute an irreplaceable link with the interior of the country. The total tonnage handled by all of the railroads from the Yew Jersey waterfront for the year 1938 was 3,597,223 ions, 91% of which was handled through the Jersey City terminals. For the same year the railroads handled 4,561,866 tons of freight by lighterage, 57% of which was handled through these facilities. Lighterage is clearly shown, through the testimony of John J. Mantell, adduced on behalf of the City of Jersey City, to be absolutely essential for the transfer of eastbound, rail-carried, freight to the ocean-going and coastwise vessels which dock at the Few. York City ports. The steamship piers in Few. York, built narrow so as to crowd maximum wharfage space into the limited riverfront area, are seriously deficient in pier floor space. This lack is made up by railroad lighterage piers in Jersey City, and by the extensive classification yards upland of the waterfront, where freight bulk can' be broken, sorted, reassembled, and classified for transfer by float to shipside. All of. these essential facilities are found in the property under appeal, and are of course invaluable to the railroads owning them.

, In view of the foregoing, it is understandable that there are no expert witnesses available who can qualify their opinions as to the true value of these unique properties by reference to sales of such property, in railroad use, to buyers proposing to continue such use. There have been no such sales. These lands are subject to assessment at their true or market value, in the condition and under the particular use in which they were actually held by their owners, i. e., as railroad terminals. Trustees of Stevens Institute v. State Board (Supreme Court, 1928), 105 N. J. L. 99. Seeking to substantiate their respective views as to the true value of these properties, the city and the railorads have done the best that could be done under the circumstances, in adducing the testimony of those men generally conceded to be the most highly qualified authorities on the valuation of waterfront and industrial real estate in Hudson County. Lacking actual sales of such properties as criteria, these witnesses have arrived at valuations based upon hypothetical sales. Only the witness, Coffin, has sold any land in railroad use, and he has also negotiated leases of railroad property. The results arrived at, compared with the primary and final assessment figures determined by the State Tax Department, involving thirty-three parcels of land, varying from .047 to'252 acres in area, are as follows:

S. T. D. Primary Valuations ........ $76,342,331
S. T. D. Pinal Valuations............. 68,708,099
Experts for Jersey City—
Coffin ........................ 102,656,372
Daly .-...................... 101,580,520
Makray .................... 98,389,800
Experts for Kailroad Companies—
Eyer...........'........ 38,557,853
Morrison ........... 38,745,294
Stack................. 43,642,202

These figures require no comment; neither do they furnish tiie board any light upon the difficult subject at hand. So far as the valuations of the railroad experts are concerned, they purport to reflect a supposed downward trend of all waterfront land values, based upon sales of property out of the Jersey City area. Such sales are no criteria, however, since not of lands comparable in any sense with those under appeal. We can only conclude that, upon the whole case, the valuations approved by us in the 1937-1938 cases, roughly corresponding with the “primary valuations” set forth above, were not properly subject to the downward revision of 10%, made by the department for the year 1939, in the light of anything shown in the records either of the prior appeals or of this one, or of the long standing knowledge of the board concerning these properties. We find such values were not in excess of the true value of these lands as of January 1st, 1938. and that their reduction, to the injury of the petitioner taxing district, for the year 1939, was erroneous.

With respect to structures, petitioner has offered full proofs of value, through two civil engineers, of each of the separate structures under appeal, numbering forty for the Delaware, Lackawanna and Western Kailroad Co., thirty-four for the Lehigh Valley Kailroad Co., three for the Yew York Central Kailroad Company, forty for the Pennsylvania Kailroad, fifty-eight for the Central Kailroad Company of Yew Jersey, and twenty-six for the Erie Kailroad. These structures, of every variety of railroad and terminal use, comprise ferry slips, bridges, piers, storehouses, powerhouses, sidings, passenger stations, service buildings, water pipe lines, machine shops, roundhouses, freight houses, trestle and other sidings, coal-trestles and pockets, coaling stations, freight transfer bridges, platforms, inspection pits, turntables, retaining walls, warehouses, heating plants, pump houses, grain elevators, and many other tj'pes of miscellaneous structures. Petitioner’s experts determined their valuations upon the basis of estimated reconstruction cost, less depreciation, and arrived at the following totals, as contrasted with the primary and final assessment totals of the State Tax Department:

Petitioners S. T.D. S. T. D.
Expert Primary . Assessed
D., L. & W. E. E. $9,063,660 $4,812,006 $4,342,898
Lehigh Valley ...... 3,266,969 2,470,325 2,285,053
New York Central . . . 84,241 63,815 53,948
Pennsylvania R. R. 10,548,388 6,323,782 5,844,638
C. R. R. of N. J. 10,114,202 7,58$,123 7,005,391
Erie R. R......... 7,486,964 4,430,512 4,098,224

While it has frequently been held that the true market valué of buildings or improvements cannot ordinarily be persuasively established by the valuation method of depreciated reproduction cost, Central Railroad Co. v. State Board (Supreme Court, 1886), 49 N. J. L. 1; Turnley v. Elizabeth, (Supreme Court, 1908), 76 Id. 42; 68 Atl. Rep. 1094; Schetty v. City of Jersey City (State Board, 1940), 18 N. J. Mis. R. 37; 11 Atl. Rep. (2d) 18; yet we have recently had occasion to hold that where structures of unique character, not commonly sold in the real estate market and having peculiar value to their owner because of the use being made of them, are involved, as is the case here, resort to consideration of the physical constituents of the structures and their cost, may be justified. City of Jersey City v. Seaboard Terminal and Refrigeration Co. (State Board, 1941), 19 N. J. Mis. R. 178 (certiorari denied by the Supreme Court). While such proofs are not at all conclusive, in view of the serious question as to whether many of these structures would be reproduced as such if required to be replaced to-day, yet they are strongly probative of tlie peculiar value of these particular structures to the railroad companies owning them, if accurate in estimating reproduction costs, since they were actually and effectively serving the present needs of the companies as of the assessing date.

The respondent railroads attack the accuracy, methods, and qualifications of the petitioner’s experts, but offer no proof whatever in rebuttal of the estimates of the former as to costs. Some of the companies have adduced testimony as to percentage of depreciation of some of the structures, while others have offered no proofs whatsoever. Hone of them have attempted to give this board the benefit of their own undoubtedly easily accessible cost figures. We can only suspect that such proofs are withheld because they would not derogate from the soundness of the estimates made by the city’s witnesses. Counsel for the City of Jersey City has developed the interesting fact that for an indefinite number of year's past, the statutory return of information as to all of the structures of each railroad company has not been supplied by the companies to the Commissioner; that since 1911 there has never been a full and exhaustive inspection by the department of all structures; that the only Information upon which the department bases its assessments of structures newly built or improved by the railroads, is that furnished by the companies themselves, consisting of a cost or value new, not independently rochecked by the department, and a proposed assessment figure for the structure, substantially reduced from the cost new figures which they submit. It is clearly established that the State Tax Department has uniformly accepted and applied the cost new figures submitted by the companies, and has also, for the first tax year after such report, assessed the structures upon the basis of an immediate allowance for depreciation of twenty to thirty per cent. Furthermore, counsel have proven that in numerous instances the cost new figures submitted by the companies to the Commissioner have been substantially less than the figures for such costs of the same structure, and for the same year, reported to the Interstate Commerce Commission. An edifying instance in point is the report by the Delaware, Lackawanna and Western Bail-road Company of its freight terminal, reported in 1930 to the Interstate Commerce Commission at a value new of $5,423,434.85, but to the State Tax Commissioner for the same year, at a value new of $1,200,000. The concrete viaduct over Henderson Street, south of the said freight terminal, was reported to the Interstate .Commerce Commission at a cost new of $353,077.50, but not to the State Tax Department at all. The concrete viaduct north of the terminal was reported at a cost new, to the Interstate Commerce Commission, of $647,755.50, but to the State Tax Department, for the same year, at a cost new of $105,200. Many other such instances of variations in cost new are shown in schedules introduced into evidence by the city, with respect to the other railroad companies, as well as to the one referred to. The same general practice of reliance almost exclusively upon reports of the companies has prevailed with respect to assessments upon structures after major repairs.

Proofs of the type here referred to fortify the conclusions which we arrived at in our determination of the appeals of the railroads in the 1937-1938 cases, to wit, that these second-' class structures were not overvalued by the State Tax Commissioner for those years. They lead to 'the further conclusion here that a reduction in such valuations to the extent of 7%% for the year 1939, or to any extent, was not justified. They establish that the separate and individual annual appraisal and assessment of each of these structures, enjoined upon the Commissioner by the statute, has not taken place, and that therefore the department could not soundly determine that there occurred a 7%% decline in the true value of all these structures, between January 1st, 1937, and January 1st, 1938, so as to justify a reduction to that extent, of the' values approved by us in the .1937-1938 cases.

We are not to be understood as criticizing the assessment methodology of the Tax Department generally, nor as indicating that any other approach to the problems of the department could be indulged, as a practical matter, with the means and facilities at hand for the performance of its duties. But nothing could justify us, as' the statutory reviewing tribunal, in approving an assessing technique which in the present case, if not reversed, would deprive the taxing districts in which second-class lands and structures are situated, of the full measure of the taxes due from the railroad companies and to which they are entitled, under the clear and explicit provisions of the Eailroad Tax Statute.

We must accordingly determine that the assessments both for lands and structures determined by the State Tax Commissioner for the year 1939, be set aside, and that the primary values fixed by him before calculation of the reductions of 10% upon lands, and 1%% upon structures, be fixed as the assessments thereon lor said year.

Judgments accordingly.


source: Caselaw Access Project

author: Hartshorne, C. P. J.

license: Public Domain

text:
    Essex County Court of Common Pleas.
    CHESTER-NEAL COMPANY, PLAINTIFF, v. ROGER N. GENERAZZO, DEFENDANT.
    Decided June 26, 1942.
    Eor the plaintiff, Jacob J. Qreenman.

    Eor the defendant, Salvatore A. Simeone.

   Hartshorne, C. P. J.

This case is submitted to the court on stipulated facts, for its opinion on the points of law involved. Succinctly stated, these facts are that defendant applied to plaintiff May 15th, 1937, for a loan, and to induce same, represented to plaintiff, in writing, that he had no outstanding indebtednesses. This financial statement was, however, false when made, to defendant’s knowledge, in that he owed debts to a series of other finance and merchandising companies. Of this indebtedness, plaintiff had no knowledge, and relying upon defendant’s representations, accordingly made the loan on defendant’s note, to be paid in installments beginning October 5th, 1937.

When defendant made no payments thereon over a period of approximately a year, plaintiff, still ignorant of the falsity of these representations, sued defendant on the note and recovered judgment. Thereafter, and bn October 31st, 1939, defendant filed a yoluntary petition in bankruptcj', and was duly adjudicated a bankrupt, scheduling plaintiff as a judgment creditor, and likewise scheduling the many other creditors which defendant had, and which he had concealed from plaintiff at the time he induced plaintiff to make him the loan, as stated above. This was the first plaintiff knew of these false representations. Plaintiff did not participate in the bankruptcy, defendant being discharged in bankruptcy February 3d, 1940.

The questions of lav submitted to this court are, specifically;. whether the present action by plaintiff against defendant, in tort, for his false representations, is barred by either (1) the previous suit on the note, or (2) defendant’s above discharge in bankruptcy.

As to the previous suit on the note, defendant claims this as a bar, relying on the doctrines of election of remedies and res judicata. But it is fundamental that the doctrine of election of remedies is based, not only upon the existence of two or more remedies, but upon “the inconsistency between such remedies.” Levy v. Massachusetts Accident Co. (Court of Errors and Appeals), 127 N. J. Eq. 49, 51; 11 Atl. Rep. (2d) 79; 18 A. J. 133, § 9; 20 C. J. 21. Moreover, “The essence of the doctrine of election of remedies is the conscious choice, with full knowledge of the facts, of one of two or more inconsistent remedies.” Adams v. Camden Safe Deposit. Co., 121 N. J. L. 389; 2 Atl. Rep. (2d) 361.

Here it is expressly stipulated that at the time plaintiff sued defendant on his note, he had no knowledge of defendant’s fraud, the gist of the present action. In addition, the action on the note, far from being inconsistent with the present action for defendant’s false representations, is entirely consistent therewith, and based upon a wrong done plaintiff by defendant, entirely separate from the one based on the fraud. The fraudulent representations were made by plaintiff May loth, 1937, but it was not till at least five months thereafter that defendant failed to pay his note, and thus committed the wrong on which the first action, for breach of contract, was brought. These separate wrongs each give rise to a separate remedy, at least unless the remedy first taken is per se inconsistent with that sought secondly.

Nor does this inherent inconsistency here exist. For in the first suit, brought by plaintiff against defendant, plaintiff sought, not to rescind the note for defendant’s fraud, but to enforce the note. And in the pending suit plaintiff seeks, not to rescind the note, but to recover in tort the damages caused him by plaintiff’s fraud, including among these the fact that, “The defendant has made no payment on account of the principal or interest of the aforesaid loan * * * which [despite demand] defendant has failed, neglected, and refused to pay.” Had plaintiff, on the contrary, first sued on quasi-contract to rescind the note fox defendant's fraud, and then sought thereafter to bring the present suit for the same fraud, relying upon the non-payment of the note, his two suits would have been inconsistent. Bor in the first he would have blown hot in his effort to rescind,the note, while in the second he would have blown cold, relying on its execution and nonpayment. In short, the present suit is consistent with the previous suit, is based upon an entirely separate and distinct wrong done plaintiff by defendant, and finally, the first suit was brought by plaintiff, not “with full knowledge of the facts,” but in utter ignorance of the fraud, the gist of the present action.

Since the gist of the present action is the fraud, which was unknown to plaintiff when he first sued on contract on the note, this issue of defendant's fraud was not even presented to the court for adjudication by either the pleadings or the evidence. The doctrines, both of res judicata, and election of remedies, are hence inapplicable, in so far as the first suit is concerned, to bar the present action.

As to defendant's discharge in bankruptcy, it is stipulated that until after defendant had listed plaintiff as a judgment creditor on the above note judgment, plaintiff knew nothing whatever of defendant's previous fraudulent representations, and even when he did, did not participate in the bankruptcy proceedings. Since plaintiff’s judgment was taken on this action on the note, in which defendant’s fraud was not, and could not have been, an issue, plaintiff would have been barred in the bankruptcy proceedings from proving defendant’s fraudulent representations, even had he sought to do so, in order to except his then claim from the bar of the bankruptcy discharge. (Bankruptcy Act, section 17, as amended June 22d, 1938; U. S. C. A., Title 11, § 35; Ehnes v. Generazzo, 19 N. J. Mis. R. 393; 20 Atl. Rep. (2d) 513.)

In the Ehnes case, a companion one to the present, instituted by another creditor similarly defrauded by this' very defendant, it was expressly held that this creditor had, by reason of taking a similar judgment on a note against this defendant, barred himself, by his own action, from proving, contrary to fact, that this judgment was based upon defendant’s fraud. Hence, such judgment was discharged by defendant’s bankruptcj'-, and the creditor could not thereafter proceed to collect such judgment. But the court there expressly reserved the question, now presented, of whether the fraud claim, never previously raised, could still be relied on despite the bankruptcy, and in view of the express exception from bankruptcy discharges of claims based on “obtaining money or property by false pretenses or false representations.” (Bankruptcy Act, section 17, supra.) Doubtless, this is the very reason why the present creditor, who has similarly been admittedly defrauded by defendant, has brought this present suit.

As seen above, the present suit, based upon defendant’s fraud, is based upon a wrong done plaintiff by defendant entirely separate and distinct from that upon which plaintiff was listed as a judgment creditor in the bankruptcy proceedings. Since such fraud was not, and qould not have been, adjudicated in such bankruptcy proceedings, such proceedings could not possibly be res judicata as to such fraud, so as to bar plaintiff’s present suit thereon. And this would follow even though plaintiff might have already been paid a dividend in the bankruptcy proceedings on his contract claim, though, of course, credit would then have to be given for such dividend on any judgment obtained in the present suit. Friend v. Talcott, 228 U. S. 27; Clair v. Colmes (Mass.), 139 N. E. Rep. 519; Gehlen v. Patterson (N. H.), 141 Atl. Rep. 914; Collier on Bankruptcy (14th ed.) 1607, § 17.16.

ISTor are Meier Credit Co. v. Yeo, 127 N. J. L. 429; 23 Atl. Rep. (2d) 293, or Myers v. International Co., 263 U. S. 64, at all inconsistent therewith. Por in the Yeo case the “facts as to fraudulent representations, which were the foundation of the plaintiff’s [subsequent] demand in the District Court, could have been determined in the Bankruptcy Court had they been properly presented,” for the reason that the creditor was apparently listed as but an ordinary, and not a judgment, creditor. Ehnes v. Generazzo, supra. But this is exactly what plaintiff could not do here, as he was a judgment creditor. And in the International Trust Co. case, the fraud issue had been expressly ruled on in the bankruptcy proceedings, the court finding that no fraud existed. This is exactly what plaintiff did not, and could not, do in the bankruptcy proceedings in the case at bar. Hence, neither plaintiff’s previous suit on defendant’s note, nor defendant’s previous bankruptcy bar the present suit for defendant’s admitted false representations.

•Judgment for plaintiff may be entered accordingly in the stipulated amount.


author: Giordano, C. P. J.

text:
    Monmouth County Court of Common Pleas.
    MYRTLE HYER, PETITIONER-APPELLEE, v. J. HOWARD SMITH, RESPONDENT-APPELLANT.
    Decided June 22, 1942.
    For the petitioner-appellee, Parsons, Labrecque & Borden (by Edmund J. Gan zona, of counsel).
    For the respondent-appellant, Proctor & Nary (by Ilaydn Proctor, of counsel).
   Giordano, C. P. J.

The single question requiring decision on the facts of this workmen’s compensation case is whether petitioner-appellee’s decedent died because of carbuncolosis as petitioner-appellee claims or because of pneumonia which respondent-appellant contends developed from independent causes not related to the burns sustained by the decedent on June 26th, 1939.

Kaymond Hyer, the decedent, was a man of forty-two years of age. He was employed by the J. Howard Smith Fisheries for over four years preceding the accident. He appeared to be in good health prior to the accident except that he occasionally suffered from carbuncles on recurring occasions. On June 26th, 1939, while in the course of his employment lie was severely burned by the explosion of an acetylene torch he was using. ITe suffered first and second degree burns to the right arm, shoulder, chest and face and the burned area covered about a fourth or a fifth of his entire body. Dr. Miele, the attending physician, testified that the decedent was in shock and had nervous prostration as a result of the burns. Decedent was sent to the Eiverview Hospital in Red Bank, Hew Jersey, on the same day of the accident and remained there until July 11th, 1939, and thereafter continued to receive treatment at his home until September 2d, 1939, when Dr. Miele discontinued his treatment. The testimony discloses that a few days thereafter Dr. Miele was again called to the decedent’s home and upon examination found him prostrated and at the time diagnosed him to be suffering from pneumonia and carbuncolosis and sent him to the Monmouth Memorial Hospital where he died on September 7th, 1939. Dr. Miele diagnosed the cause of death as being septicemia, carbuncolosis and terminal pneumonia and stated in his testimony that in his opinion the decedent’s death was connected with the burn's of the accident in that the toxic substances from the burns were absorbed into the system and these caused the carbuncles from which in turn by absorption into the system the septicemia developed and resulted in the terminal pneumonia.

The petitioner-appellee filed a claim petition on September 21st, 1939, in which she stated that the cause of death was a result of an explosion of an acetylene blow torch which seriously burned the deceased. The respondent-appellant set forth in his answer that death was in no way related to or caused by the accident.

At the hearings testimony was introduced by the respondent-appellant to show that the decedent returned to work about the 7th day of August, 1939, and performed the duties of gatekeeper for a period of several weeks. It is admitted that this work was lighter than the ordinary work performed by the deceased and that after several weeks of said employment the deceased asked the superintendent of respondent-appellant for an opportunity to do more active work, and accordingly he was put in charge of a group of men and continued to work in the plant full time up to and including September 4th, 1939. It was on this day, according to the testimony of the petitioner-appellee, that the decedent became sick and that on September 7th he was so sick that Dr. Miele was called in, at which time Dr. Miele ordered decedent sent to the Monmouth Memorial Hospital as indicated above.

The respondent-appellant contends that the decedent had contracted pneumonia as a result of exposure which was caused by his sleeping in his automobile in the latter part of August or the early part of September and relies upon the testimony of two medical experts who were called to give an answer to a hypothetical question predicated upon the contention that decedent contracted pneumonia as a result of exposure.

Dr. Carlos A. Pons performed an autopsy upon decedent and gave as his opinion of the cause of death septicemia staphylococcus and lumbar pneumonia in the terminal stage and testified that in Ms opinion the septicemia was caused by the carbuncles as a portal of entry of the staphylococcus and that the pneumonia was staphvl pneumonia and that there was no question that the cause of death was this pneumonia.

Dr. Meehan and Dr. Villapiano testified to the effect that the decedent’s death was due to the accident of June 26th, 1939, as a result of the chain of events following the same as above described.

It becomes my duty to examine the evidence which I have done and determine whether the petitioner-appellee has established, by a preponderance of probabilities, that the employment was one of the controlling causes without which the death would not have happened. Gilbert v. Gilbert Machine Works, Inc., 122 N. J. L. 533; 6 Atl. Rep. (2d) 213; Calicchio v. Jersey City Stock Yards Co., 125 N. J. L. 112; 14 Atl. Rep. (2d) 465. In my consideration of the facts which the respondent-appellant has produced to sustain his defense, by which defense he seeks to avoid liability for a cause for which lie is not responsible, it must be borne in mind that the burden of proof is upon the respondent employer, to show such cause. Atchinson v. Colgate & Co., 3 N. J. Mis. R. 451, 452; 128 Atl. Rep. 598; affirmed, 102 N. J. L. 425; 131 Atl. Rep. 921.

I am called upon to resolve a sharp conflict of medical testimony and opinion. The applicable rule as enunciated by the adjudicated cases in that there be shown a “causal relationship” between the'work or accident and the resulting disability or death in order that the accident be deemed compensable. Ciecwirz v. Public Service Electric and Gas Co., 24 Atl. Rep. (2d) 394. The test of causal connection, as approved by Mr. Justice Swayze in Newcomb v. Albertson, 85 N. J. L. 435; 89 Atl. Rep. 928, is:

“It seems to me enough if it appears that the employment is one of the contributing causes without which the accident which actually happened would not have happened, and if the accident is one of the contributing causes without which the injury which actually followed would not have followed.”

To the. same effect are the rulings in Tutino v. Ford Motor Co., 111 N. J. L. 435; 168 Atl. Rep. 749, and Bollinger v. Wagaraw Building Supply Co., 122 N. J. L. 512; 6 Atl. Rep. (2d) 396.

Prom a careful consideration of all the testimony adduced I am satisfied that the decedent suffered severe burns when his acetylene blow torch exploded. It is undisputed that he was immediately taken to the Eiverview Hospital and there remained until July 11th, 1939, and was treated at his home up to and including September 2d, 1939, and that one week later he died at the Monmouth Memorial Hospital. That the decedent was in apparent good health prior to the accident is more or less conceded and fairly inferable from the testimony. Nor does there appear to be any dispute that the only affliction decedent suffered from prior to the accident was carbuncles on recurring occasions. Viewing the uninterrupted sequence of events up to the time of his death on September 7th, 1939, I am constrained to accept as a more-logical and reasonable hypothesis the medical theory advanced by the petitioner’s witnesses.

It is to be borne in mind that reasonable probability and not ultimate medical certainty is the test to be applied in compensation cases. Jackson v. Delaware, Lackawanna and Western Railroad Co., 111 N. J. L. 487; 170 Atl. Rep. 22; Auten v. Johnston, 115 N. J. L. 71; 178 Atl. Rep. 187. All that is required is that the claimed conclusion from the offered fact be a probable or a more probable hypothesis with reference to the possibility of other hypotheses. Beylus v. Wilkinson Gaddis Co., 115 N. J. L. 43; 178 Atl. Rep. 181; affirmed, 116 N. J. L. 92; 182 Atl. Rep. 873; Hercules Powder Co. v. Nieratko, 113 N. J. L. 195; 173 Atl. Rep. 606; affirmed, 114 N. J. L. 254; 176 Atl. Rep. 198.

Accordingly, in the light of all that has been said T hold from the testimony here presented that there was a causal relationship or a chain of causation between the accidental injuries suffered by the decedent on June 26th, 1939, the subsequent lowering of his physical resistance and the contraction by him of the carbuncles from which in turn by absorption in his system the septicemia developed and resulted hi the terminal pneumonia which caused his death on September 7th, 1939.

It is my conclusion that the petitioner-appellee has established by a preponderance of probabilities that death ensued from the burns which the decedent received while in the course of his employment and that the respondent-appellant has failed to satisfy the burden of proving his contention that death ensued from any independent agency.

The judgment appealed from is affirmed.


author: Gtokdano, C. P. J.

text:
    Monmouth County Court of Common Pleas.
    JOHN WILKERSON, PETITIONER-APPELLEE, v. STEINBERG & SPIELFOGEL, INC., RESPONDENT-APPELLANT.
    Decided June 29, 1942.
    Por the petitioner-appellee, Joseph F. Mattice.

    Por the respondent-appellant, Foley & Francis (by Gerald T. Foley, of counsel).
   Gtokdano, C. P. J.

This is an appeal from a judgment in favor of the petitioner-appellee entered in the Workmen’s Compensation Bureau on January 10th, 1942.

The single question to be determined is whether or not the evidence justifies a finding that the petitioner suffered an injury arising out of and in the course of his employment by the respondent-appellant, either as a matter of law 'or as a matter of fact.

It is undisputed that the respondent-appellant maintains a wholesale grocery business in the City of Ashury Park, New Jersey, and operates a number of motor trucks in the course of said business. It is also undisputed that sometime prior to December 21st, 1940, it had in its employ one Arthur Riley and one Charles Venable. Riley was in charge of the delivery department, supervising the operation of those employed for delivery purposes and directing the operation of respondent’s trucks for such purposes. Venable was employed by-the respondent-appellant as a truck driver and was under the supervision of Riley in that particular.

It is uncontradicted that the petitioner was hired b}'" the respondent-appellant as an extra man at the daily wage of two ($2) dollars on many occasions prior to December 21st, 1940. The petitioner-appellee testified that on the morning of December 21st, 1940, Yenable called at his home as it had been his custom on many occasions prior to this date, and requested him to work. Petitioner-appellee and Yenable went directly to the plant and proceeded to deliver orders to the beachfront in the City of Asbury Park; that Yenable then drove the truck of Steinberg & Spielfoglo, respondent-appellant, to Deal, Yew Jersey, where they proceeded to move some furniture. The testimony further discloses that at noontime Yenable drove the petitioner-appellee to his home so that he might partake of his lunch and called for him after his lunch, after which they both proceeded in the truck of respondent-appellant to the plant of respondent-appellant and delivered some more orders. The facts further disclose that after the last mentioned deliveries were completed, Yenable drove petitioner-appellee to Deal where they again moved some furniture and that it was while so doing that the petitionerappellee was injured by stepping in a hole in the floor of the truck.

When the, furniture was entirely moved, Yenable and the petitioner-appellee returned to the plant where the petitionerappellee informed Eiley of his injury and received permission to go to Dr. Yaccaro. The testimony further discloses that Eiley paid him $2 for his day’s work. It also appears from the testimony that Arthur Eiley had on many occasions requested Yenable to hire extra men and that particularly on the morning of December 21st, 1940, he so instructed Yen-able. Eiley denies authorizing Yenable to move the furniture in question on the day in question and further denies that he knew of petitioner’s injuries until a few days later, although Eiley admitted that he made his home with Dr. Drake in Deal from whose premises the furniture was moved.

The principal contention of the respondent-appellant is that neither Eiley nor Yenable, admitted employees of respondent-appellant, had authority to employ petitioner to move furniture and that, therefore, petitioner could not have transferred his services from the employ of respondent-appellant, Steinberg & Spielfogel, Inc., to either Riley, Venable or Drake, since there was no expressed authority to transfer the services of petitioner to another.

The petitioner-appellee prior to the date of the accident in question had worked for Steinberg & Spielfogel, Inc., for more than five years, off and on, some weeks one day a week, some weeks two days a week and some weeks three days a week, this employment depending entirely upon Steinberg & Spielfogel, Inc., and the testimony indicates that on all these occasions the respondent-appellant’s truck would come to petitioner’s home and he would be notified by the driver that he was wanted for work that day. This was an established custom according to petitioner’s testimony and the same method of hire was pursued on December 21st, 1940, the day of the accident.

The testimony also reveals that the petitioner-appellee received his orders from the driver of the truck while on the truck and that when at the plant of respondent-appellant he received his orders from the officials of the firm, the foreman, Arthur Riley or the driver.

The rule is, as I understand it, that the principal is bound by the acts of his agent within the apparent authority which he knowingly permits the agent to assume, or which he holds the agent out to the public as possessing. The question in every case depending upon the apparent authority of the agent is whether the principal has, by his voluntary act, placed the agent in such a situation that a person of ordinary prudence, conversant with business usages and the nature of the particular business, is justified in presuming that such agent has authority to perform the particular act in question. Essbee Amusement Corp. v. Greenhaus, 114 N. J. L. 492; 177 Atl. Rep. 562.

The testimony in this case in regard to the employment of the petitioner is briefly as follows: The petitioner testified that Venable picked him up as usual, went to the plant of Steinberg & Spielfogel, did some work around the plant for an hour or an hour and a half, and then was told by Riley to go to Barnes Street to move some furniture, and that he was paid by Eiley for his day’s work as usual. He testified that he worked for Steinberg & Spielfogel as a helper on the truck, that Eiley was the foreman of the warehouse out of which he operated. Eiley testified that the petitioner reported to work that morning at the plant of Steinberg & Spielfogel, that petitioner helped Venable make three deliveries, and that he, Eiley, said nothing further to petitioner regarding moving the furniture. Venable testified that he did not report to work the morning of December 21st, 1940, and denies that he made any deliveries for Steinberg & Spielfogel that morning. However, Norman Steinberg, an official of the corporation, testified that the payroll record showed that Venable reported to work on December 21st, 1940.

The formal petition as filed with the Bureau sought compensation against Arthur Eiley and Charles Venable as well as Steinberg & Spielfogel, Inc., so that Eiley and Venable were interested witnesses. In reading the testimony I am constrained to the belief that these two witnesses were not as truthful as they could have been, but their apparent evasive and contradictory testimony does not undermine the straightforward testimony of petitioner as to the manner and fashion in which the petitioner was hired on previous occasions for a period of some five years. Petitioner’s testimony as to his hiring, as to his work about the plant that day and payment for his day’s work by the respondent, Steinberg & Spielfogel, is on the whole corroborated.

-Vs indicated by the testimony of Norman Steinberg, an official of the corporation, petitioner had moved furniture on previous occasions for and on behalf of the members of the family of the respondent, Steinberg & Spielfogel, and from custom and experience while in the employ of respondent-appellant, the petitioner, in the opinion of this court, was justified in assuming that Eiley and Venable had authority to request him to do the work which he did on the date of the accident. Petitioner was merely a helper on the truck and it was not within his province to question the type of work he should do in return for his daily wages which were paid to him by Eiley in the usual way out of company funds.

If the services of petitioner were hired out by Eiley and Yenable to another party, it was their duty as agents of the corporation, to so notify petitioner, otherwise, -under the rule of law, the principal, Steinberg & Spielfogel, Inc., is bound by the acts of its agents, Eiley & Yenable, in the contract of hire. Certainly there is no evidence that petitioner consented to any transfer of his services, which, of course, respondent-appellant under the circumstances, must show.

As far as the petitioner is concerned he was acting under orders from the truck driver who was his immediate superior. He was. either to obey his superior or possibly lose his employment. In view of this he was certainly acting within the scope of his employment, and, as stated, the act cannot be said to be ultra vires the corporate powers. See Perragino v. McCue’s Dairy (Supreme Court, June 16th, 194$, reported New Jersey Law Journal).

From the facts as proved flows the proper deducible infer- ' ence, tantamount to proof of the fact that respondent’s truck driver had the right to, and in fact, did at times actually supervise the work of the.helper on his truck; and that he was clothed by the respondent with at least apparent, if not expressed authority so to do.

It is my opinion that from the facts, reasonable inferences and the law, that the award of the Compensation Bureau should be affirmed in all respects.


author: McGrath, C. P. J.

text:
    Union County Court of Common Pleas.
    FOSTER V. BROWN, PETITIONER-APPELLEE, v. ALLIED PLUMBING AND HEATING CO., RESPONDENT-APPELLANT; AUGUST ARACE & SONS, INC., RESPONDENT-APPELLEE.
    Decided July 1, 1942.
    Por the petitioner-appellee, David Roslcein (by Rodger Lancaster).
    Por the respondent-appellant, Allied Plumbing & Heating Co., Cox cf; Walburg (by Arthur Mead).

    For the respondent-appellee, August Arace & Sons, Inc., Henry Grosman (by Isid or Kalis ch).

   McGrath, C. P. J.

Petitioner, while working for August Arace & Sons, Inc., in March, 1941, hurt his back while threading pipe. The work required him to pull the handle of a pipe threading tool. At the time he was making $80 to $90 a week, sometimes $120, part of which was overtime. His actual rate does not appear. He says he notified his employer of the accident and I am satisfied that he did. The Deputy Commissioner gave him an award, but instead of giving judgment against August Arace & Sons, Inc., his emplojrer at the time the accident happened, he gave judgment against a former employer, the Allied Plumbing and Heating Co., and at the rate of his former wages.

It appears that in August, 1939, petitioner had hurt himself while in the employ of the first employer, the Allied Plumbing and Heating Co., and the Deputy Commissioner thought that the injury to his back while employed by Arace & Sons was a recurrence of the old injury which petitioner had received previously while working for the Allied Plumbing and Heating C.o. This petition against August Arace & Sons, Inc., was dismissed. This was erroneous.

A reading of the testimony shows that as a matter of medical diagnosis the second injury was not a recurrence of the first. Dr. Edgar, who first saw the man in September, 1939, and again in March, 1941, says that the second major joint injury was definitely the right sacro-iliac, whereas the first time it was definitely the lumbar-sacral, and a consideration of all the medical testimony convinces me that Dr. Edgar’s opinion is correct'. The lumbar region is a small portion of the back bone about seven inches above the sacrum. The sacrum is a bone lying at the bottom of the spine formed by vertebrae.

Of course, the first injury made the man’s back weaker than it was before, but it does not follow that this makes the first employer responsible for . subsequent accidents. The first employer is liable only for direct consequences of an accident, and the inquiry should be whether the subsequent injury is reasonably attributable to a proximate cause set in motion by the accident or by some other agency. The chain of causation must not be broken by some new- intervening agency. McDonough v. Sears, Roebuck & Co., 127 N. J. L. 158; 21 Atl. Rep. (2d) 314. This is the English rule, cited in McDonough v. Sears, Roebuck & Co., supra (at p. 161), and it is the proper interpretation of our Compensation Act.

An “accident” under the act is something arising out of employment, the risk of which might have been contemplated h}' a reasonable person, when entering the employment, as incidental to it, and a risk is incidental to employment when it belong^ to or is.connected with what a workman has to do in fulfilling his contract of service. Bryant v. Fissell, 84 N. J. L. 72; 86 Atl. Rep. 458.

The risk of injuring petitioner’s back while threading pipe for Arace & Sons was not something reasonably to be contemplated as incident to his employment with his former employer, the Allied Plumbing Company, when entering employment with the Allied Company. iN or was it connected with anything petitioner was doing to fulfill his contract of service with the former employer. He was not threading the pipe for the Allied Company but for Arace & Sons, his employer at the time the occurrence happened.

It is true that he had a weak back when he came to work for Arace, his second employer, but increase of disability is one of the things which the act was intended to compensate, and this was the risk the Arace Company took when it hired him. In the present case the proper inquiry is: Does the occurrence meet the test of an accident as against the employer from whom compensation for the occurrence is sought? Did it arise out of and in the course of the employment ? To hold the first employer liable in this case would be illogical and unjust since he has no control over the risks or the conditions of the employment with the second employer, and the occurrence is one with which he had no connection.

I find that the Bureau erred in giving judgment against the wrong respondent and at the wrong rate.

It is, therefore, on this 1st day of July, 1942, ordered, that the cause be referred to the Bureau for proper disposition under the statute.

A motion whs made to dismiss the appeal as to August Arace & Sons, Tnc. This is denied and exception noted. The order of the Bureau dismissing the petition as against August Arace & Sons, Inc., was erroneous, and is reversed.


author: Oltphant, C. C. J.

text:
    Mercer County Circuit Court.
    THOMAS W. HUGHES, PLAINTIFF, v. EUREKA FLINT AND SPAR CO., INC., A CORPORATION OF NEW JERSEY, DEFENDANT.
    Decided November 8, 1939.
    For the plaintiff, Rudolph, Eisner.

    For the defendant, Samuel D. Lenox.

   Oltphant, C. C. J.

Defendant is a manufacturer of flint, spar and feldspar products. , Plaintiff was employed in the plant of the defendant in various capacities from November, 1920, to July 26th, 1938. He alleges in his complaint that during all of this time, through the negligence, of the defendant in numerous particulars, he contracted pneumonoconiosis or silicosis on July 26th, 1938, from the continued inhalation of dust particles. Plaintiff’s suit was instituted on November 17th, 1938. Defendant, among other defenses, pleads the statute of limitations, in which it is set up that the plaintiff is barred from bringing any action against the defendant for any alleged wrongful act, negligence or default alleged to have occurred or taken place prior to November 17th, 1936.

This motion is to strike out those parts of the separate defenses embodying that defense. This presents a difficult problenj. To determine it requires the answer to the question, when does a cause of action accrue or arise in an occupational disease case ?

The statute of limitations R. S. 2:24-37; N. J. S. A. 2:24-37 literally relates only to the commencement of suit. It does not define accrual of a cause of action.

To find the answer, it must be determined whether the wrong complained of is single and continuous or plural and discrete.

A breach of duty must result in actual damage to be actionable. Damnum and injuria must both exist or else there is no cause of action. Ochs v. Public Service Railway Co., 81 N. J. L. 661. In that case the doctrine is recognized that a consequential injury resulting from a negligent act is the gravamen of the charge and that the statute of limitations runs from the time of the injury. If this were not so, every person could be held responsible for every negligent act he commits, irrespective of whether or not any other person is damaged thereby.

The existence of a disease such as complained of here is dependent on many factors; the length of exposure, the nature and intensity of the dust in the air, the resistance or susceptibility of the individual and many others. In some cases it may be contracted after short exposure, in other cases under identical conditions there may be no consequences whatever. It cannot be that if two mén begin working at the same time in a plant negligently operated and one contracts silicosis within two years thereafter, that he is privileged to bring his suit, but that the other who does not succumb to ihe dust within the two years from first inhalation is barred from bringing his action except for any aggravation of a condition occurring within the first two years of employment. Yet this is the rule followed by some of the cases as typified by that of Schmidt v. Merchants Dispatch, 270 N. Y. 287; 200 N. E. Rep. 824, and apparently followed by Judge Barbour in Ziegler v. Henry Maurer & Son, 15 N. J. Mis. R. 654 and 659; 194 Atl. Rep. 615. That theory is that the injury is complete when the alleged negligence of the defendant caused the plaintiff to inhale ihe deleterious dust. In diseases such as silicosis, most often no effects of the inhalation of the dust are evident until after the two year period from the first inhalation. Of course, it may be said, and some cases are to this effect, that after damage or injury has occurred, the plaintiff may sue for any aggravation of his condition during the two years previous- to suit. This, to my mind, is a statement of nullity, for proof of such is a practical impossibility in occupational disease cases.

Many opinions are in the books in support of the various theories, respecting the application of the statute of limitations in occupational disease cases. Many of them are set out in the opinions of Judge Hand in Pieczonka v. Pullman Co., 89 Fed. Rep. (2d) 353, and that of Judge Mantón in Michalek v. U. S. Gypsum Co., 76 Fed. Rep. (2d) 115. The Supreme Court of Pennsylvania-in Plazak v. Allegheny, 188 Atl. Rep. 130, has to my mind enunciated the true rule, i. e., that the statute begins to run from the last date of continuous employment. Certainly if possible, within the limits of the statute an interpretation of the phrase “Cause of Action” should be reached which is in favor of the injured party and against the wrongdoer. While the statute of limitations is one of repose and security, it was never intended to defeat a remedy before the right existed. Within statutory limits, for every wrong there is or should be a remedy.

To hold that a plaintiff may prove acts of negligence extending over a period of perhaps many years, is probably an undesirable result, perhaps contrary to one of the general purposes of the statute of limitations. It imposes hardships upon a defendant by compelling him to meet a claim involving his actions of many years before, but it would be even more undesirable and unjust to bar a plaintiff’s remedy before his cause of action existed, which is certainly equalty violative of the intent of the statute, definitely not violative of its language and infinitely more abhorrent to logic and justice.

Whenever, therefore, the nature of the cause of action is such that it embraces and covers a substantial period and the acts complained of and the employment are continuous, I am of the opinion that the plaintiff may allege and prove facts material thereto no matter how long before the statutory period they took place. The wrong should be treated as single and continuous, pot plural and discrete. There is no substantial justice in any other rule. This being so in a case such as that presented here, the statute begins to run from the last date of employment.

The motion will be -granted.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    ELIZABETH C. LOEW, PETITIONER, v. HAHNE & COMPANY, A CORPORATION, AND LIBERTY MUTUAL INSURANCE CO., RESPONDENT.
    Decided June 27, 1942.
    Dor the petitioner, Mortimer Katz (David Roshein, of counsel).
    Dor the respondent, John W. 'Taylor (by Richard II. Twisted).
   From the testimony adduced, it appears that on January 12th, 1942, the petitioner, during the course of her employment on the top floor of the respondent’s building, was struck on her head by particles of glass that fell from a skylight which formed a part of the same building. The petitioner’s testimony indicates that she had left the washroom and was on her way to her desk when she was struck by glass from the skylight overhead. She received first aid at the store and thereafter taken to St. Barnabas Hospital and treated by Dr. Baxter Clement. A skin graft was performed and a piece of skin was removed from her right thigh and transplanted on her forehead at the site of the injury.

The petitioner’s present complaints consist, inter alia, of a numbness over the area from which the skin was taken for the graft, of headaches over the region of her left eye, twitching of the left eye, occasional nervousness, some restlessness and the cosmetic effects of the scar itself.

Dr. Max Kummel testified on behalf of the petitioner. He had examined the petitioner twice, the last time on May 13th, 1942.. He estimated the petitioner’s orthopedic disability and recommended a neurological examination. This was done by Dr. Samuel Hirsehberg and revealed hyper-activity of the biceps and knee jerks and hyper-active tendo-achilles reflexes. The left lower eyelid showed a blephoro spasm. There were moderate tremors of the extended fingers, tremors of the tongue and segmentary hypaesthesia in certain areas' about the body. The corneal reflexes were reduced,-more so on the right. These were in addition to his finding of the scar in the left frontal region of her skull. It was his opinion that the petitioner had sustained cerebral concussion with a resulting traumatic neurosis, which together with her disfigurement entitles her to a disability of 17% of total.

The respondent produced two employees of the respondent; one, a George Turner, maintenance man, who described the structural plan of the respondent’s building and the adjacent 14-story building. He described the location of the broken skylight in relation to the adjoining building. He came on the scene of the accident shortly after it occurred and he testified that he found particles of glass from the skylight on the fourth floor of the respondent’s building directly below the aperture in the skylight and he also found mixed with glass from the skylight pieces of a Coca Cola bottle. He described the skylight as having no screen either over it to protect it from missiles which might penetrate the skylight, nor was there any protection under the skylight to catch any foreign objects which might pass through the skylight. Furthermore, there was no wire interwoven in the said glass skylight to prevent it from breaking.

Dr. Baxter Clement testified on behalf of the respondent in respect to the skin graft at the St. Barnabas Hospital. His objective findings included those of a definite and visible scar on the forehead, change in color and texture from the skin surrounding the scarred area. He found no disability orthopedically and was unable to make an estimate of disability which would result from the cosmetic defect caused by the scar. Dr. Jack Blumberg testified on behalf of the respondent and it was his opinion that the petitioner was suffering from a disability of a neurological nature of 5% to 71/2% of total.

The essence of the respondent’s defense was that the accident did not arise out of the petitioner’s employment and that the accident was in fact due to some intervening cause, which could not be foreseeable by the respondent and, therefore, was not a hazard which would impose liability on the respondent. I find no merit in the respondent’s contention for the following reasons: Firstly, T cannot draw an inference from the fact that pieces of a Coca Cola bottle were found among particles of glass from the skylight that a Coca Cola bottle was precipitated through the skylight and hit the petitioner. ÜSTo proof was offered of anyone having thrown a bottle from outside the building. It is clear that under the Workmen’s Compensation Act an employer or insurance company, attempting to ascribe the disability of an employee to some cause other than a compensable accident, has the burden of such proof.. Quinn v. Henry Becker & Son, 19 N. J. Mis. R. 508; 21 Atl. Rep. (2d) 617; Krov v. Centour Construction Co., 18 N. J. Mis. R. 593; 15 Atl. Rep. (2d) 619. Hor does it appear to me that such a fact if proven would have relieved tile employer of statutory liability. Geltman v. Reliable Linen, 128 N. J. L. 443; 25 Atl. Rep. (2d) 894. Secondly, the petitioner was in a place, where she reasonably had a right to be, during the course of her employment with the respondent. There is no question but that the petitioner was on her employer’s premises within a few feet of her desk where she had been assigned to work, when she was struck by falling glass from the skylight. Such being the fact as I do find, it seems to me that the respondent had furnished a place with that particular hazard existing for the petitioner to work in. The respondent’s testimony indicated that there was no protection on the skylight, so that any employee could be struck by glass from the skylight, in the event it might break. I feel that there was a duty placed upon the respondent to have the skylight protected, so that an employee such as the petitioner would be safe from any untoward event ■such as did occur. The respondent’s own failure of duty appears to be a causative factor in the petitioner’s disability. Thirdly, by reason of the fact that the petitioner was struck by the glass from the skylight taken in conjunction with the second reason above stated, it does not seem unreasonable that the respondent should have foreseen the occurrence of an accident as it did take place. Geltman v. Reliable Linen Supply Co., supra. “And such a risk may be either an ordinary one, or directly connected with the employment, or one extraordinary in character, indirectly connected therewith because of its special nature. Bryant, Adm’x, v. Fissell, supra.

“It need not have been foreseen or expected; it suffices if the injury flowed as a rational consequence from a risk connected with the employment. Hall v. Doremus, supra. * * * The injury ‘need not have been foreseen or expected, but after tire event it must appear to have had its origin in a risk connected with the employment, and to have flowed from that source as a rational consequence.’ In re McNicol, 214 Mass. 497; 102 N. F. Rep. 697; L. R. A. 1916A, 306.
“* * * In inquiring whether or not an injury by accident in fact arises out of the employment, it surety is unnecessary to ask whether such a thing has ever happened before or is likely to happen again within, say, a hundred years, or, for that matter, for ever. It may happen, and has happened, and it has happened because the poor man was a schoolmaster. The event has proved that it arose out of his employment.”

Foley v. Home Rubber Co., supra, 89 N. J. L. 474; 99 Atl. Rep. 626. “The risk is inherent in the employment itself. The manner in which the accident is brought about is not at all of the essence of the matter; the vital question always being: Was the accident connected with the employment? If it was, then it arose out of the employment, provided it occurred in the course of the employment.”

Dennis v. White (A. J.) Co. (1916), 2 K. B. Div. 1; 10 B. W. C. C. 280. “* * * There is nothing in the act about any necessity for showing that the employment involves an extra or special risk, and once it is clear, as it is in the present case, that the accident was the result of a risk reasonably incident to the performance of the servant’s work, all injury as to the frequency or magnitude of the risk is irrelevant.”

Therefore, I find that the petitioner did sustain an accident arising out of and in the course of her employment with the respondent. I have had opportunity to observe the petitioner when she appeared in court before me, as well as carefully consider the testimony adduced. I do not feel that there is much conflict in the medical testimony in this case. After considering all of same, I find that in addition to the cosmetic defects which are responsible to some extent for the traumatic neurosis, which is admittedly present, the petitioner has a disability to her right lower extremity, which while not manifesting any functional loss has produced certain structural changes and has resulted in certain symptoms which are of a disabling nature. I fix the petitioner’s disability as a physiological unit at 12%% of partial permanent total. # ❖ t',i # >): t’fi «{:

It is, therefore, * * * ordered that judgment be and the same is hereby entered in favor of the petitioner and against the respondent in accordance with the above.

Hakky S. Medinets,

Deputy Commissioner.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    ALICE YARBOROUGH, PETITIONER, v. WILLIAM SLOKUM AND SALLY SLOKUM, RESPONDENTS.
    Decided May 26, 1942.

      Pot the petitioner, Nathaniel Alper._

    For the respondents, Wolber, Gilhooly & Yauch.

   In the case sub judice, petitioner while in the employ of the respondents met with an accident arising out of and in the course of her employment on December 1st, 1941.

Subsequent to the accident and prior to the filing of a formal petition, respondents moved from New Jersey to New York;

On March 6th, 1942, a formal petition was filed and service rendered through the secretary of the Workmen’s Compensation Bureau in accordance with section 34:15-55.1. There is no question as to this service in so far as the procedure of same was concerned.

Eespondents moved by notice of motion to quash process or notice, alleging that aforementioned only provides service on non-residents at the time of the employment.

After careful consideration of the arguments presented by the counsel for the respondents and the counsel for the petitioner, as well as a study of the cases referred to by the respondents, I have come to the following conclusion.

This is a remedial statute and must be liberally construed.

The intent of the legislature is outlined in the last paragraph of R. S. 34:15-55.1; N. J. S. A. 34:15-55.1, which reads “This section shall be construed to extend the right of service of process upon non-residents and shall not be construed as limiting any provisions for the service of process now or hereafter existing.”

In my opinion the intention of the legislature was to cover all non-residents whether such a relationship existed prior to or subsequent to the accident.

Motion is hereby denied.

John C. Wegneb,

Deputy Commissioner.


text:
    New Jersey Department of Labor, Workmen's Compensation Bureau.
    STANLEY KICZKO, PETITIONER, v. BAYLIS COMPANY, RESPONDENT.
    Decided July 8, 1942.
    For tlie petitioner, Hyman Halpern (Leo Ycmoff, of counsel).
    For the respondent, James J. Carroll.

   It appearing from the stipulations and testimony adduced before me as follows:

That petitioner was employed by respondent at wages of $18 per week which entitled him to a compensation rate of $12 per week.

That on the 30tli day of April, 1941, his left middle and ring fingers were caught in a machine, resulting in an amputation of the tips. Dae notice of said accident was given to the respondent.

The distal phalanx of the second finger was removed and a portion of the distal phalanx of the third finger was also removed leaving a small segment thereof.

Despondent voluntarily paid compensation for temporary disability at said rate for a period of two weeks or $24 and compensation amounting to 50 per cent, of each of the second and third fingers or a total of 25 weeks at said compensation rate or $300.

Ht Hí H* ❖ Hs s£ Hí

From the X-rays it appears that a small section of the second phalanx of the second finger is missing as the result of said accident.

Hi :',i Hí $ Hi $ Hi

Compensation in this case ■ is determined under B. 8. 34:15-121; N. J. S. A. 34:15-121 under the terms of which “The loss of any portion of the thumb or any finger between the terminal joint and the end thereof shall be compensated for a like proportion of the period of time prescribed for the loss of the first phalange of such member.” Compensation therefore is not dependent upon the evidence of loss of efficiency, but upon whether there has been the loss of any portion of the finger between the terminal joint and the end thereof. Here there has been the loss of such a portion of the finger.

It is therefore * * * ordered the judgment final be entered in favor of petitioner.

H: ‘ :j« Hí . ❖ H* H* H*

Harry S. Medinets,

Deputy Commissioner.


author: Quinn, President.

text:
    State Board of Tax Appeals.
    ESSEX COUNTY PARK COMMISSION, PETITIONER, v. CITY OF NEWARK, TOWN OF BLOOMFIELD, BOROUGH OF CALDWELL AND VILLAGE OF SOUTH ORANGE, RESPONDENTS.
    Decided June 23, 1942.
    For the petitioner, Harrison & Roche (by John J. M cDonough).

    For City of Newark, Raymond Schroeder (by Vincent J. Oasale).

    For Town of Bloomfield, Edward C. Pettit (by Franklin R. Shaw).

    For Borough of Caldwell, Philip D. Elliott.

    For Village of South Orange, Howard R. Cruse.

   Quinn, President.

Petitioner is a public agency of the County of Essex and owns seven parcels of real property, assessed for 1940 in the respondent taxing districts. All of these properties, except one, a vacant lot, are tenanted dwelling premises, taken in by petitioner by foreclosure or deed in lieu of foreclosure of bonds and mortgages heretofore granted by petitioner out of funds in its Park Police pension fund. The vacant lot, situated in Newark, was likewise taken over, by deed in lieu of foreclosure.

Petitioner claims all of these parcels are exempt from taxation upon the ground that no constitutional legislative enactment has subjected count}»' property of any nature to local property, taxation. The taxing districts cite B. 8. 54:4-3.3; N. J. S. A. 54:4-3.3 as authority for the taxation of the property. That reads as follows:

“The property of the United States and, except us otherwise provided by article 1 of this chapter (sections 54:4-1, et seq.), the property of the state of New Jersey; and the property of the respective counties, school districts and taxing districts, when located therein and used for public purposes, or for the preservation or exhibit of historical data, records or property shall be exempt from taxation under this chapter, but this exemption shall not include real property bought in for debts or on foreclosure of mortgages given to secure loans out of public funds or out of money in court, which property shall be taxed unless devoted to public uses. The lands of counties, municipalities, and other municipal and public agencies of this state used for the purpose and for the protection of a public water supply, shall be subject to taxation by the respective taxing districts where situated, at the true value thereof, without regard 'to any buildings or other improvements thereon, in the same manner and to the same extent as the lands of private persons, but all other property so used shall be exempt from taxation.”

It is thus specifically provided that real property purchased in for debts or on foreclosure is taxable, though owned by counties. Respondents say the classification for exemption and taxation thus set up is unconstitutional, relying upon decisions such as Jersey City v. Blum (Court of Errors and Appeals, 1925), 101 N. J. L. 93; 127 Atl. Rep. 214, and others, holding certain aspects of this statute other than that here in question offensive to the requirement of uniformity in taxation, under article IV, section 7, paragraph 12 of the State. Constitution. ■ It is sufficient to say that this board will not find a statutory provision unconstitutional as a matter of first impression. There being no court decision directly holding the specific taxing clause of the section here relied upon by the respondents to be unconstitutional, we must apply it literally and affirm the assessments of these parcels. It may be observed, parenthetically, that it is fairly inferable from the language in the opinion of the Supreme Court in Trenton Savings Fund v. Richards (Supreme Court, 1889), 58 N. J. L. 156 (at p. 160) ; 18 Atl. Rep. 582, that under the constitution a classification for taxation of all realty purchased in for debt or acquired by or in lieu of foreclosure of a mortgage, is valid.

The judgments of the Essex County Board of Taxation, affirming the assessments, are affirmed.


text:
    State Board of Tax Appeals.
    DELAWARE, LACKAWANNA AND WESTERN RAILROAD COMPANY, PETITIONER, v. CITY OF JERSEY CITY, RESPONDENT. CITY OF JERSEY CITY, PETITIONER, v. DELAWARE, LACKAWANNA AND WESTERN RAILROAD COMPANY, RESPONDENT.
    Decided June 30, 1942.

      Por Delaware; Lackawanna and Western Railroad Co., John A. Laird.

    Dor City of Jersey City, Charles A. Rooney (by John J. Meehan).

   Quinn, President.

The appeals represented by the first caption are applications for the reduction of assessments for the year 1939 on property owned by the railroad company and situated in the'City of Jersey City. The appeals in each of these cases were dismissed by the Hudson County Board of ’Taxation.

The appeals represented by the second caption are brought bjr the City of Jersey City to restore assessments on the same parcels of property, which were canceled by the Hudson County Board of Taxation for the year 1940, on the ’ground .that these parcels were exempt from local taxation for said year, for the reason that they constituted property used for railroad purposes, assessable solely by the State Tax Commissioner under the operation of R. 8. 54:4-3.11; N. J. S. A. 54:4-3.11, and R. 8. 54:19-1, et seq.; N. J. S. A. 54:19-1, el seq. The city maintains that the County Board of Taxation was without jurisdiction to determine the question of the nature of the use of this property on the ground that the Supreme Court is exclusively vested with jurisdiction to determine the nature of the use of property owned by railroad companies, in cases where such property is assessed both by the local authorities and by the State Tax Commissioner, under R. S. 54:26-15, el seq.; N. J. S. A. 54:26-15, et seq. These sections read as follows:

“54:26-15. If property of .a railroad or canal company has or shall have been, in any jrear, assessed by the local authorities of a taxing district, and has or shall have been also assessed by the state tax commissioner as property used for railroad or canal purposes, the supreme court or any three justices thereof, assigned by the chief justice, shall determine, in a summary manner, the character of the property and whether used lor railroad or canal purposes and by whom it has lawfully been assessed. This determination shall be made whether the taxes in question have been paid or not and whether a certiorari to review either assessment has been granted Or not.
“54:26-16. The determination shall be made under an order to show cause at a time and place to be therein designated. The order shall be granted by the chief justice of the supreme court upon application ex parie by any of the parties interested, namely, by the attorney general on behalf of the state, by the owner of the property assessed or by the authorities of the taxing district.
“The order shall be served upon the parties interested not making such application, not less than ten days before the day fixed therein for the hearing. Depositions to be used on such hearing may be taken on two days’ notice by either party.
“54:26-17. The justices before whom the matter shall be heard, may, if they see fit, view the property in dispute, to guide them in tlieir decision. The judgment of the court shall direct the cancellation or reduction of either assessment, as file character of the property may require, and shall make such order as to the return to the taxpayer of any tax or portion thereof, that may have been paid to the state, or to any taxing district not entitled thereto, as the court shall deem just. The payment of costs may be directed in such manner as the court may deem equitable. The judgment shall be conclusive and final in all collateral proceedings, but may be reviewed on appeal by the court of errors and appeals.”

It clearly appears that nothing is stated in these sections to the effect that the summary method of determination pro-, vided therein shall be exclusive. It is clearly indicated that the relief provided by these sections is obtainable only on application by the Attorney-General, the taxpayer, or the authorities of the taxing district. The City of Jersey City does not claim to have invoked the statutory relief. Under these circumstances we do not see how it can be said that the County Board of Taxation is vested with any less jurisdiction to determine the right of exemption from local taxation of this category of property than in the case of any of the many other types of exemption subject to determination by county boards of taxation.

In Jersey City v. Board of Equalization of Taxes (Supreme Court, 1907), 74 N. J. L. 382; 65 Atl. Rep. 903, it was held that the Board of Equalization of Taxes possessed “jurisdiction to review a local assessment made upon property owned by a railroad company, and to cancel it to the extent that it represented an assessment upon property used for railroad purposes. The court analyzed the several statutes .governing the jurisdiction and powers of the Board of Equalization of Taxes, and concluded that the general extent of the rights conferred upon the board to determine the right of exemption from taxation in many diverse situations was convincing of the right to determine whether or not property owned by a railroad company was exempt from local taxation, as used for railroad purposes. In our opinion this reasoning is equally applicable here. The city has not introduced any evidence whatsoever as to the question of the nature of the use of this property, whether for railroad purposes or otherwise, and the determination of the County Board of Taxation is theréfore entitled to the presumption .of correctness. Newton Trust Co. v. Atwood (Supreme Court, 1908), 77 N. J. L. 141; 71 Atl. Rep. 110. It therefore follows that the judgments of the county board in the 1940 cases must he affirmed.

With respect to the 1939 cases, our consideration of the expert'testimony adduced leads to the conclusion that the assessments made by the city should be affirmed and judgments in accordance will be entered in each of said cases.


text:
    State Board of Tax Appeals.
    NEW JERSEY MANUFACTURERS CASUALTY INSURANCE COMPANY, PETITIONER, v. CITY OF TRENTON, RESPONDENT.
    Decided June 30, 1942.
    For the petitioner, George E. Meredith.

    For the respondent, Louis Josephson.

   Quinn, President.

Petitioner is a stock insurance company, subject to taxation upon its personal property under R. S. 54:4-22; N. J. S. A. 54:4-22, as revised by the amendment thereof in Pamph. L. 1938, eh. 245. The respondent taxing district levied an assessment for the year 1941 of $496,100 upon the personalty of the petitioner. An appeal for the reduction thereof was dismissed by the Mercer County Board of Taxation. Hence this appeal. The statute, as amended, is as follows:

“Every stock insurance company organized under the laws of this state, other than a life insurance company, shall be assessed and taxed in the taxing district where its office is situated, upon the full amount or value of its property (exclusive of real estate and tangible personal property, which shall be separately assessed and taxed where the same is located, and exclusive of all shares of stock owned by such insurance company and exclusive of non-taxable property and of property exempt from taxation), deducting from such amount or value all debts and liabilities certain and definite as to obligation and amount, and the full amount of all reserves for taxes, and such proportion of the reserves for unearned premiums, losses and other liabilities as the full amount or value of its taxable intangible property bears to the full amount or value of all its intangible property; provided, however, the assessment against the intangible personal property of any 'stock insurance company subject to the provisions of this section shall in no event be less .than fifteen per centum of the sum of the paid-up capital and the surplus in excess of the total of all liabilities of such company, as the same are stated in the annual statement of such company for the calendar year next preceding the date of such assessment and filed with the department of banking and insurance of the state of New Jersey, after deducting from such total of capital and-surplus the amount of all tax assessments against any and all real estate, title to which stands in the name of such company.
“The capital stock in any such company shall not be regarded for the purposes of this act as a liability and no part of the amount thereof shall be deducted, and the person or persons or corporations holding the capital stock of such company shall not be assessed or taxed therefor. No franchise tax shall be imposed upon any insurance company included in this section.”

It is conceded that the company's assessment for the year in question is controlled by the proviso in the section establishing the fifteen per cent, minimum tax, and the issue in dispute is as to whether, in the computation of said minimum, petitioner is entitled to the deduction as a liability, of a so-called “contingency reserve,” amounting to $1,375,000, set up as a liability on its annual statement, dated December’31st, 1939, filed with the Department of Banking and Insurance. Petitioner urges that the act literally calls for an allowance of this deduction, while respondent maintains that the decided cases disallowing deductions of contingent reserves, under the act prior to the 1938 amendment, are still authoritative and require a disallowance of the deduction.

Prior to Pamph. L. 1938, ch. 245, the section read as follows :

“Every fire insurance company and every stock insurance company other than life insurance, shall be assessed in the taxing district where its office is situate, upon the full amount of its capital stock paid in and accumulated surplus. The real estate belonging to every such corporation shall be taxed in the taxing district where situated, and the amount of assessment upon the real estate shall be deducted from the amount of any assessment made upon the capital stock and accumulated surplus. No franchise tax shall be imposed upon any such fire insurance company or other stock insurance company included in this section.”

This provision was construed as calling for a determination of capital stock and surplus by the deduction of debts and liabilities of the company from the true value of its gross assets, and the deduction therefrom not only of the assessed value of real estate, but also of any non-taxable or exempt property which has entered into the determination of such capital stock and surplus. Fidelity Trust Co. v. Board of Equalization (Supreme Court, 1908), 77 N. J. L. 128; 71 Atl. Rep. 61. But deductible liabilities were held not to include liabilities contingent or uncertain in nature, but only those fixed and certain with respect both to obligation and amount. Trenton v. Standard Fire Insurance Co. (Court of Errors and Appeals, 1909), 77 N. J. L. 757; 73 Atl. Rep. 606; Commercial Casualty Insurance Co. v. State Board (Supreme Court, 1937), 119 N. J. L. 94; 194 Atl. Rep. 390. Such a reserve as that here in question would not have been allowed as a deduction under- the act prior to the amendment, since it is clearly contingent upon a decline in the value of the securities of the company equal to the amount of the reserve and is therefore not a certain liability. See, also, Newark Fire Insurance Co. v. State Board (Supreme Court, 1937), 118 N. J. L. 525; 193 Atl. Rep. 912; Universal Insurance Co. v. State Board (Supreme Court, 1937), 118 N. J. L. 538; 193 Atl. Rep. 915.

The change in the assessing methodology wrought by the 1938 amendment was undoubtedly induced by the onerous effect upon the companies of the construction of the act by the courts in the eases last above cited. The legislative recognition of the distinction between liabilities fixed and certain, on the one hand, and book liabilities regardless of certainty, on the other, is clearly manifest in the drafting of the amended section. In dealing with the computation of the minimum fifteen per cent, tax, the legislature has called for the determination of capital and surplus, “in excess of the total of all liabilitieSj as ihe same are stated in ihe annual statement of such company * * * filed with ihe department of banking and insurance ■ * * The liability here in question was stated as a liability by petitioner in its statement to the department. The department by formula fixes the basis upon which such reserves are set up. For this board to disregard the plain direction of the act that all liabilities stated in the company’s report to the Department of Banking and Insurance, should be allowed as deductions, in the computation of the minimum tax, would constitute a thoroughly unwarranted subversion of the legislative intent, manifested in the clearest possible language. References in other parts of the section to liabilities, certain and definite as to obligation and amount serve only to emphasize the different kind of qualification and description of the liabilities specified for deduction, in the computation of the minimum tax. We therefore hold the contingent reserve here in' question deductible, for the purpose of-computing the minimum tax to which petitioner was subject for the year 1941.

Petitioner’s capital and surplus, as stated in its annual report for 1939, aggregate $2,550,279.60. Assessed real estate amounted to $37,797.42. The remainder, subject to the statutory minimum assessment of fifteen per cent., is $2,512,482.18. The taxable valuation is therefore $376,872.33. The prayer of the petitioner is for a reduction of the assessment to the sum of $377,372.33, and judgment granting same will be entered.