text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    EVA MARIE THEBERGE, PETITIONER, v. PUBLIC SERVICE ELECTRIC AND GAS COMPANY, RESPONDENT.
    Decided February 3, 1947.
    Dor the petitioner, Herman M. Wilson.

    Dor the respondent, Carl T. Freggens (David M. Sdlick, appearing).
   A formal petition was filed in the above-entitled matter claiming compensation by virtue of the provisions of R. S. 34:15, et seq. An answer was duly filed by the respondent. The matter came on for hearing before this court at Newark, New Jersey, on the 8th clay of January, 1947.

At the start of trial it was stipulated and agreed by and between counsel that the court should first determine the question of liability before any witnesses were brought in to testify on the question of causal relationship between the accident and the death of decedent. Petitioner claimed that the accident arose out of and in the course of decedent’s employment, which the respondent denied. There was little dispute on the factual situation at the close of trial on the liability phase of the case. The main dispute was as to whether the facts showed a compensable case under our law.

The respondent, a public utility corporation, owned a gas plant and office at 1025 McCarter Highway, Newark, New Jersey, where and from which employees worked 'who took care of the' distribution of illuminating gas from the gas plant to respondent’s customers. Across McCarter Highway directly to the east were additional buildings and an auto parking yard or court also owned by respondent. The auto, parking- yard was only about 85 feet square; was fenced abutting McCarter Highway, and paved with asphalt. It was used for storage of some of respondent’s 50 or 60 trucks and autos when the vehicles were not in use. Due to the nature of respondent’s business, vehicles moved in and out of the yard at all hours, and there was a gasoline pump located in same to take care of fueling the vehicles. On April 30th, 1946, during the noon lunch period, a game of baseball was started by some of the employees. This game consisted of the batter hitting the ball after which the various players engaged in the sport would field it and throw and catch the ball among themselves before returning it to the batter. Heither the respondent nor the players provided any bases or base line.s and there was no base running. This game was being played during the employees’ noon lunch period as stated, and the decedent, George Theberge, participated in the sport during his lunch period for which he was not paid by the respondent. He was free to spend his lunch period as he chose and the matter of staying on the premises or leaving them was his free personal choice. Theberge had been playing about ten minutes when one of the other players threw the ball to him, and after catching it he twisted and fell, fracturing his right leg. He was taken to a hospital where .he died on May 12th, 1946. Theberge was employed by the respondent. as a gas regulator man and his duties consisted of the regulation of gas devices and painting gas holders at the gas plant and in the territory served by the-respondent. He was not hired or employed as a ballplayer and the matter of an employee’s ballplaying ability was not considered on his hire or discharge. The ballplaying was started by the employees with their own equipment during their leisure time in the noon lunch period and the game was open to anyone who cared to participate. Across the street to the north of the office and about the same distance from same as the auto parking yard, there was a city park and it had been the practice of some of the employees to play ball in either the city park or auto parking yard for the past three to ten years during spring and summer lunch periods. 'The number playing varied from two to ten men, and whether the ballplaying started at all, or in the city park or garage yard was a matter of chance and choice exercised by the employees. The employer kept no record oE what the men did ■on their leisure time, and the method and means oE spending this time was loft to the individual employee.

Some employees of the gas plant had voluntarily formed an ■athletic and social “association” among themselves which, among other things, participated in sports activities with ■other Publie Service units. This group of employees financed itself from membership dues, purchased equipment with no financial aid from the employer and elected its own officers free from any control by the respondent. Theberge, who was forty-seven years of age and weighed over 200 pounds, was not a member of the team already selected by the employees to represent them in baseball games during the coming summer season. The day of the accident was only the second or third time the employees had played ball in the spring of 1946, and Mr. Hopkins, the superintendent of respondent, testified that he did not know the employees played hall in the garage yard in 1946, or any year prior thereto, although he had seen them playing in the city park previously mentioned in past years. Other employees testified that in a prior year the glass top on the gasoline pump and several windows in an adjacent building had been broken and the employees had been told to stop playing in the garage yard. ‘There was a rest and recreation room in a building some distance from the auto parking yard where employees could eat and rest and seek recreation during the lunch period and ■other non-working hours. This room was not connected with •or any part of the auto parking yard where the accident occurred. The room was furnished for recreational purposes by equipment furnished and supplied by the employees’ athletic and social club, and whether the men spent any time there was optional with themselves. The rest and recreation room and ball team are cited by the petitioner as showing the respondent supported recreational activities. I do not feel this contention helps the petitioner, and, in addition, find they are separate and distinct from the impromptu ball-playing indulged in by the employees during their lunch period on the day of the accident.

The testimony makes it quite clear that the ballplaying and not the duties connected with Theberge’s job was the cause of the accident. The ballplaying was an independent act on his leisure time, having no connection with his work. There is no proof that the employer encouraged him to play ball and it was not a requirement of his job. The testimony and facts of the case indicate that it was spring and some of the men started playing baseball, and on the second or third time of playing in 1946, the accident occurred. This is regrettable, but it does not mean the respondent is liable under the Workmen’s Compensation Act.

In Conklin v. Brighton Mills, Inc., 105 N. J. L. 386; 144 Atl. Rep. 815, the Court of Errors and Appeals held:

“Manifestly the mere happening of this accident upon the premises of the defendant, caused by a person not engaged in the prosecution of the master’s work, and at a time when the servant was free to indulge his spare time for diversion or other personal conduct, free from the master’s supervision, could impose no liability upon the master. * * *”

In Levengood v. New York Shipbuilding Corp., 24 N. J. Mis. R. 273; 48 Atl. Rep. (2d) 570, a petitioner was denied compensation against his employer where he was in his employer’s parking lot changing a tire on his own car after working hours, the court holding that at the time of injury he had embarked on a personal venture.

The petitioner cited among other cases the case of Conklin v. Kansas City Public Service Co., 226 Mo. App. 309; 41 S. W. Rep. (2d) 608, which case involved injuries received in an employees’ leisure time baseball game, as authority for holding the accident in this ease compensable. This Conklin case was limited to its own facts and distinguished by the same court that, decided it in Dunnaway v. Stone & Webster Engineering Corp. et al., 227 Mo. App. 1211; 61 S. W. Rep. (2d) 398, another case involving a noon hour recreational accident to an employee. In 1946 the Michigan Supreme Court in a unanimous opinion in Luteran v. Ford Motor Co., 313 Mich. 487; 21 N. W. Rep. (2d) 825, denied compensation to an employee injured at a leisure period baseball game on facts somewhat analogous to the factual situation in our present case.

In Porowski v. American Can Co., 15 N. J. Mis. R. 316; 191 Atl. Rep. 296, I held that the petitioner in that case involving ballplaying had not sustained the burden of proving his injury due to an accident arising ont of and in the course of employment, and dismissed the petition. To my knowledge the Porowski case has been followed several times since by trial courts in denying compensation to employees who suffered injuries while playing baseball in their nonworking hours when the employer obtained no advantage because o£ the ballplaying.

I do find and determine from the testimony that the petitioner’s decedent was engaged in ballplaying for his own amusement during his leisure time on April 30th, 1946. During this period he was not paid by the respondent and was free to spend the noon lunch period on or off the premises as he pleased. He chose to play ball for his own amusement. The ballplaying indulged in was not sponsored or ordered by the respondent company. The equipment was provided by the players themselves. The ball playing was the motive for decedent’s movement at the time of his injury and not the duties of his job as a gas regulator man. The risk of injury and the injury itself in this case arose out of the ballplaying and not the decedent’s duties in connection with his job. The respondent is a public utility, and the ballplaying by decedent was not shown to have any connection with respondent’s business. The employer provided a rest and recreation room for the employees who wanted to stay around the premises during their lunch period, and when Theberge started playing ball on asphalt during his leisnre time, he placed himself in a dangerous position by his own choice.

Therefore, considering all the evidence and the law applicable thereto, I find that the petitioner has failed to sustain the burden of proving an accident to the decedent arising out of and in the _ course of his employment with the respondent.

It is, therefore, on this 3d day of February, 1947, ordered that this claim petition be and the same is hereby dismissed-

John C. Wbgnbk,

Deputy Commissioner.


source: Caselaw Access Project

license: Public Domain

text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    DAVID LEVENTHAL, PETITIONER, v. WRIGHT AERONAUTICAL CORPORATION, RESPONDENT.
    Decided December 30, 1946.
    For the respondent, John W. Taylor.

    For the petitioner, Maurice .Leventlial.

   A formal claim petition having been filed by petitioner-seeking benefits under the terms and provisions of the Workmen’s Compensation Act of the State of New Jersey, as-amended and supplemented, N. J. S. A. 34:15-1, et seq., and respondent having duly filed its answer, this matter came on for hearing before me at Paterson in the regular way on ■October 11th, 1946.

Petitioner testified that he was employed by respondent in Department 408; that he played on a softball team which represented Department 207 in an inter-departmental league ■and also played on a team, claimed to represent respondent’s plant in the North Jersey Industrial League; that the latter team was known as the “Wright Aero.” team and was the same, team which played in the inter-departmental league as the Department 207 team; that the írWright Aero.” team wore uniforms furnished by respondent, bearing the legend '“Wright Aero.” and these uniforms were also worn by the team in inter-departmental league play; that the standings of both teams were posted on bulletin boards located in various parts of respondent’s plant and such postings were controlled by the company recreation department, which also gave considerable publicity to team activities in the official company paper “Wright At The Moment;” that the umpires employed in various games played by the teams were paid by respondent; that he suffered his claimed injury while playing in an inter-departmental league game on June 5th, 1945, which was attended by some'two or three hundred spectators.

Drank Colvin testified for petitioner to the effect that he ■also played on the team; that uniforms were furnished by respondent; that the umpires at each game were paid by respondent and that publicity was given the teams’ activities, both on the company bulletin boards and in the plant paper.

On cross-examination, both petitioner and Colvin, admitted that they played ball on their own time and provided their ■own transporiation to the playing field.

Salvatore Dierro, testifying for petitioner, stated that he was the team manager, that uniforms were furnished by respondent to the players participating in the North Jersey Industrial League games; that the uniforms worn by the team in North Jersey Industrial League games were not worn as such when the team played in inter-departmental league games although various players on the team wore certain portions of the uniform but ordinarily wore miscellaneous clothing while playing in inter-departmental league games; that umpires, balls and bats, &e., were furnished by respondent ; that the players played on their own time;. that he personally selected the players on the team and out of his own personal funds had posted $25 security with the North Jersey Industrial League on behalf of the team and for this reason considered it his own personal privilege to pick the players on the team.

The real issue is whether or not petitioner suffered injury by reason of an accident which arose out of and in the course of his employment by respondent. While it is generally true that the Workmen’s Compensation Act is remedial and therefore liberally construed, it is equally well settled that a liberal construction of the Compensation Act cannot, in anywise, form the basis for an award unless there exists a factual situation which establishes that the employee suffered injury by accident “arising out of and in the course of” his employment. I find as a fact that the evidence does not show that respondent in anywise benefited by petitioner’s participation in the inter-departmental game and, for that matter, also find that there is no testimony from which it can be concluded that respondent in any way benefited by his playing on the team which played in the North Jersey Industrial League; that the hazard of injury by playing ball was not a risk of injury reasonably instant to petitioner’s regular employment but one voluntarily assumed by him; that the injury was sustained at a time and place not associated with petitioner’s employment and as a consequence the injury occurred by reason of an accidental episode which did not occur in the course of nor arise out of petitioner’s employment.

It is therefore this 30th day of December, 1946, ordered that the formal claim petition herein filed and the proceedings thereon be and hereby is dismissed.

John C. Wegner,

Deputy Commissioner.


author: Davidson, C. C. J.

text:
    Passaic County Circuit Court.
    MAX FRIEDMAN AND JOSEPH KRONBERG, PARTNERS TRADING AS J. & M. FABRICS, PLAINTIFFS, v. ARTHUR MANDELBAUM, DAVID MANDELBAUM, ABNER LEVINE, DOROTHY MANDELBAUM, ARTHUR MANDELBAUM, AS TRUSTEE FOR WILLIAM J. MANDELBAUM, ET AL., DEFENDANTS.
    Decided February 1, 1947.
    For the plaintiffs, A. Victor Koch.

    For the defendants, Cole, Morrill é Nadell.

   Davidson, C. C. J.

This is a motion to quash a writ of attachment. Defendants appear specially and recorded stipulation of counsel provided for presentation of oral testimony to the end that the court might directly pass upon the merits of the issue.

The only question presented for determination is whether plaintiffs’ claim is for liquidated damages within the contemplation of R. S. 2:42-5; N. J. S. A. 2:42-5, as the general rule established in this state is that “an attachment will not lie for unliquidated damages, and can be used only when the demand is for a sum certain.” Schenck v. Griffin, 38 N. J. L. 462, 467.

The suit is based upon an alleged breach of contract for the manufacture of 100,000 yards of cloth, the claim arising out of loss of contemplated profits upon the yardage not yet manufactured.

Our reported cases consistently follow Heckscher v. Trotter, 48 N. J. L. 419; 5 Atl. Rep. 581, 584, which holds that:

“The general rule is that unliquidated damages resulting from the violation of a contract cannot be recovered by attachment, unless the contract affords a certain measure or standard for ascertaining the amount of the damages. The standard should be the subject-matter of the contract. The Standard must be shown by the contract, without the aid of inferences from extrinsic facts or circumstances.”

Manifestly, the present case is not embraced within the limits of the rule, for “neither reference to the contract nor to any method of calculation arising out of it or resulting from it by operation of the law, could establish the profit which the plaintiffs would have made upon the merchandise so manufactured.” MacDowell & Co. v. Burke, 3 N. J. Mis. R. 741; 130 Atl. Rep. 199; Sher v. Church, 93 N. J. L. 73, 75; 107 Atl. Rep. 57.

The profit in any business transaction necessarily depends upon many variable and uncertain factors and attachment will not lie where the damages flowing from a breach of the contract are to be determined by a jury.

While “debt” as used in the statute does not carry its literal and restricted meaning, and the act provides that it shall be construed in the most liberal manner for the benefit of creditors, “this provision was clearly not intended to give the courts, under decisions in this state, any right to uphold an attachment where there was not, in fact, proper ground therefor.” Connelly v. Lerche, 56 N. J. L. 95; 38 Atl. Rep. 430.

My conclusion is that the motion to quash must be granted.


author: Flannagan, C. P. J.

text:
    Essex County Court of Common Pleas.
    MARY E. LANGHELD, PETITIONER-APPELLEE, v. FEDERAL SHIPBUILDING AND DRY DOCK COMPANY, RESPONDENT-APPELLANT.
    Decided January 20, 1947.
    For the petitioner-appellee, David Z. Jesselsohn and Louis G. Jacobson.

    For the respondent-appellant, Btryher, Tams & Horner (by Thomas Moloney and John J. Monigan).

   Flannagan, C. P. J.

The petitioner was employed as a part-time canteen worker at an hourly rate. She was injured in the course of the performance of the duties of her employment, and it is conceded that she is entitled to compensation for her injury. The only difference arising between the contesting parties on this appeal is as to the method of computing the petitioner’s “daily wage” rate under the provisions of the statute, R. S. 34.15-37; N. J. S. A. 34:15-37, which provides that where the rate of wages is fixed by the hour, “the daily wage shall be found by multiplying the hourly rate by the customary number of working hours constituting an ordinary day in the character of the work involved.”

It is said that the words “ordinary day in the character of the work involved” refers to employees in general doing work of the same character in the same plant, rather than to the .ordinary'day of the particular employee who has sustained injury. I am of the opinion that the statute contemplates compensation on the basis of the earnings of the employee herself, rather than upon that of herself and other employees combined. If this be true then the issue resolves itself into a question of fact, to wit, what was the customary number of working hours constituting an ordinary day in the petitioner’s experience during the period of her employment with respondent ?

The petitioner was hired in the beginning of November, 1942, and Worked for respondent until November 19th, 1943, when her injury occurred, a period of substantially one year.

She was hired as a part-time canteen worker for four hours per day at 65% cents per hour. So that the initial period of her association with respondent was on the basis of four hours work per day. Her hourly rate continued the same throughout the entire period of her employment regardless of the nature of the duties performed.

During the concluding period of her employment she was likewise employed on the basis of four hours per day of service, and was working as a canteen worker, although she had in the intervening period worked for a time as a cafeteria worker.

The unusual and extraordinary may, by sufficient repetition, recurrence, or period involved, become the customary and ordinary.

The question is whether petitioner, having contracted, and started her initial period or hiring, on the basis of a customary and ordinary working day of four hours, and having ended her employment while working on the same schedule, the variance from that status in the intervening period was of such duration or frequency as to convert what under the contract of employment and initial period was customary and ordinary into the unusual and extraordinary, thus establishing a new customary and ordinary working day period.

Petitioner’s testimony shows that this was not the case. She testified that when she worked as a canteen worker (her initial employment status) she worked part-time, namely, four hours per day, and when this was varied she substituted as a cafeteria manager worker at full pay, namely eight hours per day. The following questions and answers appear in the record:

"Q. This accident occurred a little over a year after you first commenced your employment? A. Yes.
"Q. During that year about how much of that year had you worked part-time and full time? How would you divide it up ? A. I would say maybe two or three months, perhaps.
“Q. Two or three months as what? A. Pull time.
"Q. And the rest part time? A. Part time.”

Later in her examination the following testimony was given by her:

“Q. And the only time you deviated on the four-hour per day schedule was when you filled in for someone else? A. Yes, sir, as manager.
“Q. In other words, you took the manager’s place when she was out or something like that? A, Yes, sir, I managed for almost three months straight when one of the managers went in the hospital.”

I find that the customary number of working hours constituting an ordinary day in the character of the work involved herein was four hours; that petitioner worked six days a week, five of which were, throughout the entire period of her employment, at the hourly rate of 65^ cents per hour and the sixth day at (time and one-half) 98.3 cents per hour.

Her weekly compensation rate is found to be $11.35. Her disability I find, as determined by the commissioner, to be partial permanent to the extent of 20 per cent, of total, and temporary disability for 16 2/7 weeks.

I approve and adopt the awards as made by the commissioner to the respective doctors and to the stenographer and the credits as given by him in his determination.

A determination may be submitted under rule 9.


author: Beeonio, D. 0. J.

text:
    District Court of Hoboken.
    MICHAEL LOMANO, PLAINTIFF, v. IDEAL TOWEL SUPPLY CO., DEFENDANT.
    Decided March 25, 1947.
    For the plaintiff, Morris Fdelstein.

    For the defendant, Reid, Kelly & Flaherty.

   Beeonio, D. 0. J.

This is an action at law by Michael Lomano against the Ideal Towel Supply Co. for damages sustained to Mr. Lomano’s automobile, by an automobile owned and operated by the defendant.

The plaintiff charges in his state of demand that on or about the 13th day of June, 1946, his automobile was parked in a lawful, careful and prudent manner on a business highway in the City of Jersey City and that on that day an employee of the defendant operated, managed, controlled and parked the said automobile truck in such a careless and negligent manner that the said truck collided with the automobile owned by the plaintiff.

The case was tried before me without a jury. In brief, the evidence disclosed that the driver of the defendant’s truck left Ms automobile parked in front of the automobile of the plaintiff, and that in so doing, he left the ignition keys in his truck and went into his employer’s premises.

The plaintiff called as one of its witnesses the driver of this truck and from his testimony, he admitted that the truck belonged to his employer and that he left the keys in the truck and that two boys about the age of ten years old, got into the truck, started the same up causing the truck to move backwards and damaging the plaintiff’s car which was parked behind the truck. This witness also admitted that there were other occasions prior to this incident, when trucks of the same defendant, parked in the immediate area of the defendant’s premises, were tampered with by other children who were minors while the said trucks were left unattended by the defendant’s employees. Two police officers also testified that when they came to the scene of the accident they saw that the truck of the plaintiff was damaged.

The two boys who were responsible for starting up the truck testified that when they entered the truck the ignition keys were there and that they started the engine. The truck of the defendant thereupon moved backwards striking the plaintiff’s automobile and causing damages.

At the conclusion of all the testimony, the defendant moved for a direction of a verdict in its favor on the ground that there was no liability on its part. The court denied the motion.

The plaintiff cited to this court the ease of Barbanes v. Brown, which case was decided by the Supreme Court of Hew Jersey on December 3d, 1932, and reported in 110 N. J. L. 6; 163 Atl. Rep. 148.

In this Barbanes case our Supreme Court said: “The general rule is that a person who leaves an automobile in a public street, unattended, is under a duty to exercise such care in doing so as a person of ordinary prudence would exercise in the circumstances; and, failure to exercise such care, whereby the machine, by force of gravity or by some other cause reasonably to be anticipated or guarded against gets under way and inflicts injury, renders such person liable therefore in an action for damages. Spanko v. Spitalnick, 101 N. J. L. 5; 127 Atl. Rep. 663; Sheridan v. Arrow Sanitary Laundry Co., 105 N. J. L. 608; 146 Atl. Rep. 191.”

Of course, motor vehicles are in common use and an automobile is not regarded as a dangerous instrumentality per se, but the possibility of danger from careless handling is obvious.

I find therefore, after weighing and considering all of the evidence, that the defendant could have reasonably anticipated or guarded against this contingency, especially in view of the fact that it had some knowledge prior to this accident that it’s trucks were being tampered with by children in that neighborhood, and with that knowledge at it’s command, nevertheless, took no precautionary measures to safeguard its automobile trucks, and was thereby negligent.

Judgment in favor of the plaintiff in the sum of $350 will therefore be rendered against the defendant.


author: Conklin, Commissioner.

text:
    Division of Tax Appeals.
    IN THE MATTER OF THE APPEAL OF THE TOWN OF MONTCLAIR v. THE KIMBERLY SCHOOL, FOR THE YEARS 1944, 1945 AND 1946.
    Decided January 28, 1947.
    For the petitioner, John Ferguson.

    For the respondent, Robert F. Darby and Alan W. Garrick.

   Conklin, Commissioner.

The petitioner seeks to restore the assessment on the property of the Kimberly School, both real and personal, for the years 1944, 1945 and 1946. The Essex County Board of Taxation held that all the property is exempt from taxation under the provisions of R. S. 54:4-3.6; N. J. S. A. 54:4-3.6.

It is the contention of the Town of Montclair that the respondent school does not meet the test for exemption, the test being whether the purposes and objects of the school claiming the exemption are fundamentally charitable or philanthropic. Dwight School v. State Board of Tax Appeals, 114 N. J. L. 594; 177 Atl. Rep. 875; affirmed, 117 N. J. L. 113; 187 Atl. Rep. 36.

The Kimberly School rests its case on the decision of the Supreme Court case of Miss Fine’s School, reported in Princeton v. State Board, 96 N. J. L. 334; 115 Atl. Rep. 342, and Buxton Country Day School, Inc., v. Township of Millburn, 18 N. J. Mis. R. 443; 14 Atl. Rep. (2d) 269; and attempts to draw an analogy between the facts in those cases and the facts in the instant case.

The applicable law to the ease wherein a private school claims exemption under R. S. 54:4—3.6; . N. J. S. A. 54:4-3.6, is concisely set forth in an opinion of the Supreme Court written by Mr. Justice Perskie in Trenton v. State Board of Tax Appeals, 127 N. J. L. 105; 21 Atl. Rep. (2d) 644, wherein it was set forth on page 106:

“The right to * * * an exemption depends entirely upon the facts and circumstances of each particular case.

“Since statutes granting exemption from taxation are in the nature of a ‘renunciation of sovereignty’ and are at war with the sound basic principle that the durden of taxation ought to fall equally upon all,’ they are most ‘strongly construed’ against those claiming exemption. Thus the facts and circumstances in each case must clearly and convincingly establish the right to exemption within the statute granting exemption, otherwise the general rule is invoked which subjects ‘all property to a just share of the public burdens.’ Otherwise stated, the proofs must be ‘free from fair doubt.’ The burden of proof is upon the claimant to establish the asserted right to exemption.”

Thus a study of the proofs with a consideration of each fact presented is necessary.

The Kimberly School of Montclair is a private school for boys and girls in the lower grades and for girls only in the higher grades. It is one of the well known college preparatory schools for girls in Essex County, ninety-two per cent, of its graduates entering college.

It was founded by Mary K. Waring and Mary A. Jordan as a private school for girls around 1906. It grew in enrollment and reputation under their ownership. In 1940, they employed Miss Helen B. Mason as headmistress. At the time of her employment, and apparently before her employment, they discussed with her the advisability of the incorporation of the school.

On page 7 of the transcript of testimony of Miss Waring taken before the County Board, and made a part of this record is the following:

“Q. Who thought of having this corporation, Miss Waring? A. Miss Jordan and I thought of it as being incorporated. We thought that the time had gone by for the personally owned school. There are a great many advantages in being incorporated, and when we made our arrangements with the new headmistress we told her it was our purpose then to incorporate. That .was 1940 or. 1941.”

The school was incorporated in March, 1941, under the provisions of R. S. 15 :1-1, et seq.; N. J. S. A. 15 :1-1, et seq. (“Corporations and Associations not for Profit”). In the same year the corporation entered into a lease of the buildings, grounds and equipment with the Misses Waring and Jordan and then it began operation of the school.

Miss Waring, Miss Jordan and Mrs. Mason went on the board of trustees and Miss Waring was made chairman of the board. These services were without compensation. The other board members were chosen from graduates, parents of students and faculty.

An amended charter was filed in May, 1944, which increased the number of trustees from seventeen to eighteen. Both certificates of incorporation provided that the net assets of the corporation upon dissolution of the corporation be not considered the property of the members, but bo distributed to another educational institution or institutions not incorporated for pecuniary profit as selected by the trustees; or if the trustees fail to act within a reasonable time, then those institutions in the same category as designated by the Chancellor of the State of Hew Jersey should be the recipients of the net assets.

The corporation purchased the real and personal property of the school from the lessors in September, 1943, for the sum of $50,776. The terms of the sale provided that the corporation assume two bank mortgages in the sum of $10,395; pay to Miss Waring and Miss Jordan, jointly $2,381 in cash; and execute two identical bonds, one to Miss Waring and one to Miss Jordan of $19,000 each, by the terms of which it was agreed that the corporation was indebted to the amount of the sums mentioned and agreed to pay five per cent, interest on the loan, quarterly. These bonds were, secured by a purchase-money mortgage, the rate of amortization of which was partially controlled by the amount of the tuition fees collected by the school.

Income from all sources for the year 1943 was $60,323.94. This included tuition, registration fees, books, lunches, endowments and gifts. Of this sum $56,062.07 was from tuition fees, $470 from registration fees, $1,093.71 from the sale of books, $1,342.39 from lunches, $303.70 from recess lunches, $758.41 from gifts, $190.26 from miscellaneous sources, and a net of $103.30 from endowment funds which had been turned over to the school at the time of its incorporation by the Misses Waring and Jordan.

The expenses for the school year, including rental, taxes, amortization of mortgages, interest, salaries and all items necessary to operate a school such as this and totaled $57,522.86; which left an excess over income of $2,801.08.

The amount of the salaries to be paid to the personnel of the school is left in the discretion of the headmistress. (Article III, paragraph 22 of the by-laws.)

This is a private school and gives the student many advantages. The classes are small and have no more than twelve students to each teacher. Individual instruction and study supervision are stressed.

Since the ownership of Miss Waring and Miss Jordan the salaries of the faculty and other employees have increased. The tuition charges have also increased.

In the case of Princeton v. State Board, supra, $8,000 was raised by voluntary contribution as the result of the interest of an outside group. In the instant case there was no fund raising activity to purchase the school and enlarge it, but it appears that it was an effort emanating from the Misses Waring and Jordan, to incorporate and transfer the assets to the corporation.

As the proofs do not indicate them to be “free from doubt” and as the respondent failed to carry the burden imposed upon it by law, and failed to prove clearly and convincingly that it operated, on October 1st, 1943, as a fundamentally charitable institution and not for profit it is not entitled to the exemption. Trenton v. State Board of Taxes and Assessment, surpa; Dwight School of Englewood, supra.

The only proof of value is the assessment of Block G, Lot 80, land $5,900, improvements $83,000, personalty $1,500, total $30,400; and Block G, Lot 1, land $6,800, improvements $800, total $7,600; all for the years 1944, 1945 and 1946. Judgment accordingly.


author: Smith, Joseph L.

text:
    Essex County Circuit Court.
    ISADORE STEIN, PLAINTIFF, v. CITY OF NEWARK, DEFENDANT.
    Decided March 7, 1947.
    Eor the plaintiff, Julius Stein.

    Eor the defendant, Thomas L. Parsonnet (by George B. Astley), Frank J. Garico, of counsel.
   Smith, Joseph L.

At the conclusion of the plaintiff’s case the defendant moved for a nonsuit and the court reserved its ruling on that motion and directed the defendant to proceed with its defense. At the conclusion of the defendant’s case, when both sides had rested, the defendant moved for a direction of verdict, which motion is now before this court.

The plaintiff, Mr. Stein, briefly contends that he was the owner of property at No. 327-329 15th Avenue, Newark, New Jersey, and No. 342 Morris Avenue. That the first numbered building contained six family apartments and the second building referred to contained a store, two apartments and some garages. These two buildings had a common wall, common foundation and with a common roof.

In the spring of 1944 the plaintiff observed that his building had several cracked walls, the windows and doors would not properly close and he thereupon inspected the cellar and he found there the condition to which he has testified, which in effect was that the cellar floor had sunk and that the foundations were no longer holding up the building. The plaintiff thereupon stated that lie called in his plumber for the purpose of ascertaining if there was any water from any of the pipes, the sewerage or the plumbing under bis control, which caused this condition to these buildings. As I recall his testimony the plumber who was called in stated that there was nothing wrong with the sewerage system or the plumbing, in other words, the water lines, as far as it related to those under the control of the plaintiff, Mr. Stein. The condition did not improve, but became worse and later on Mr. Stein, who seems to me, according to his testimony, was unable to give the actual date, but he said around the middle of May, hut according to the testimony of defendant was around the 1st of June, visited the building department of the City of Newark and directed the building department to the condition that existed in his buildings and sought from them their advice as to what he should do about the condition of his buildings.

The representative of the building department visited these premises and observed the condition in the cellar and observed at that time there was a dampness or water in the cellar; made a report to Ms superior and subsequently, I think it was on June 13th—the letter is in evidence—Mr. Stein was advised by the building department that it would be necessary for him, in connection with the building itself, to shore up the building and to arrange for the removal of his tenants.

On Juné 13th, Mr. Stein then brought this condition to the attention of the water department of the City of Newark. This was the first time this condition was brought to the attention of the water department. The City of Newark, through its water department was furnishing water to the houseowners and other private consumers in the city, and in doing so was acting in a private business capacity and not in its governmental capacity and it is bound therefore to exercise ordinary care, that is a reasonable degree of care, in view of the dangers involved which the great mass of ordinarily prudent persons engaged in the same or similar business would and do exercise under like circumstances. For any failure to exercise this degree of care proximately causing injury to another, the city is liable to the same extent that a private person or a corporation operating a water works system is liable; no more and no less.

The defendant is not an insuror of the safety of its water pipe lines. Where the defective condition is not a result' of negligent construction but the result of wear and tear, it must appear that the condition which produced the damage complained of had either been in fact brought to the prior notice of the defendant, which is actual notice, or that the condition had existed for such a space of time as would have afforded the defendant sufficient opportunity to have observed the defect. This is called constructive notice.

It would seem' to me that ordinarily the question of constructive notice is for a jury to decide but however where the defect is not observable to the plaintiff or the defendant, as the evidence clearly indicates in the instant case, and not visible, and which can only be discovered by a close examination, it seems to me then it is a matter of law for determination by the court. I, therefore, feel, under all the evidence in this case, that there is no evidence that would warrant this court in determining other than that there was' no construe-live notice involved in this case and therefore that question is not one of fact for submission and determination by the 3U17-

As I have already indicated the plaintiff offered evidence, I think, as he says, although he was not certain, as already referred to, that some time in May he notified the building department of the City of [Newark that his building was in a dangerous condition. The defendant by its testimony, indicates that this notice to the building department was given ■on or about June 1st, in fact, on June 1st. However, it would seem to me that this is immaterial as there is no evidence that notice of the leak in the water pipes of the city was given to the water department and further, there is no presumption that notice to the building department of a leak in the water line, under the evidence in this ease, was by the building department communicated to the water department where it was no part of the building department’s duty to receive and report such complaint to the water department.

From the evidence before me it would seem to be alleged and admitted that the only notice of the water leak was communicated to the water department on June 13th and in fact that is the only time notice was given, that there was a leak in any of the pipes or water system over which the city water department as the owner of the water works had any notice of the condition contributed or alleged to have been the responsibility of the city.

The damage to the property, of which the plaintiff complains had, from the evidence, been completed. The damage had been done at the time the notice was received by the city on June 13th. The very next day or the following day, on June 14th, the defendant, after making an investigation and examination of the complaint, immediately and promptly repaired the damaged pipe and shut off the water. Certainly, the city acted with reasonable promptness in shutting off the water and repairing the leak, after being notified by the plaintiff of the condition of affairs as the plaintiff understood and found them to be.

It is rather surprising to this court that this condition has never been heretofore, as far as reported authorities of our state reveals, been determined by the courts of Hew Jersey. I have, therefore, in my investigation of this question in the short time that I have had, found that the rule stated in the Pennsylvania courts are in no way inconsistent with the evidence in the instant ease, or the ruling I am about to make in this case and particularly am I impressed with the rules in Massachusetts and I refer particularly to the case of Goldman v. City of Boston, 274 Mass. 329; 174 N. E. Rep. 686, 687, where the Supreme Judicial Court of Massachusetts said:

"It was essential for the plaintiff to recover that some negligence on the part of the defendant should be shown in the laying of the water main or in its care and maintenance. Hothing appears to show the ordinary life of the pipe, or the frost levels in the vicinity.” And in the instant case, may I suggest that this court is not reminded of any evidence relative to the life of this pipe in question.

Purther, quoting from the case of Goldman v. City of Boston, "In fact there was no evidence of negligence. Ho inference indicating negligence of the defendant can be drawn from the previous break.” However, in that case the court said, “The doctrine of res ipsa loquitor is not applicable. The water main may have settled and cracked from other causes than the defendant’s negligence in laying the pipe or in .caring for it. The act itself is evidence of negligence when the direct cause of the accident, and so much of the surrounding circumstances as was essential to its occurrence, well within the sole control and management of the defendant, or their servants, so that it is not unfair to attribute to them a prima facie responsibility for what happened.”

It is quite true and undenied and therefore admitted in the instant ease that this pipe in question was solely maintained and under the sole control of this defendant.

How, another case I would like to call attention to is in Massachusetts, the case of Gerard et al. v. City of Boston, 299 Mass. 488; 13 N. E. Rep. (2d) 414 (at p. 415), where the Supreme Judicial Court of Massachusetts said: “We think that there was no evidence of negligence. The cause of the break is unknown.” There is no evidence in this case to indicate what caused this break. “No negligence in laying the pipe or in maintaining it appears. There is no evidence that a pipe, as old as this one was, may not safely be used. The slight seepage which was noticed in the basement might have come from a variety of sources, some of which might not have been in the control of the defendant, and did not indicate a defect in the main. "We think that due care did not require the defendant to expose and examine all the pipes at the intersection of the streets named.”

In the instant case the testimony suggests, as I recall it, that there were 55,000 service pipes in the City of Newark.

Therefore, I am constrained to grant the motion for a directed verdict on the ground urged and it will bo so ordered and an exception granted to counsel.

Mr. Stein: I respectfully pray an exception.


text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    RUBY JONES, PETITIONER, v. A. C. STEEL PIER CO. ET AL., RESPONDENT.
    Decided March 18, 1947.
    Por the petitioner, Alexander K. Blatt.

    Por the respondent, Marry Miller.

   The petition in this case seeks compensation for the wife and daughter of Prank B. Jones, who, it is alleged in the petition, sustained an accident arising out of and in the course of his employment on July 19th, 1945, as the result of which he died two days later.

A stipulation of facts was filed, from which it appears that the Atlantic Steel Pier Company was engaged in operating an amusement enterprise and contracted with the other respondents to furnish a "water circus” act, and that the decedent while operating a motor boat in connection with said "water circus” act, fell overboard into the Atlantic Ocean, sustaining the injuries from which he died.

The question submitted for determination upon such stipulation on motion to dismiss is whether or not this court has jurisdiction, the respondent contending the State Compensation Act is not applicable and any relief must be sought under federal statutes. The petitioner, of course, contends this court has jurisdiction.

The question of jurisdiction has long been a perplexing one in cases of this nature. I will refer just briefly to several of our more important decisions which I deem pertinent in connection with the determination of the issue now at hand.

In the case of March v. Vulcan Iron Works, 102 N. J. L. 337; 132 Atl. Rep. 89, a man fell from a ladder leading from the deck of a ship in dry dock to the floor of the dry dock. The dry dock was in navigable waters and the ship was there for repairs, and the Court of Errors and Appeals determined that this Bureau had no jurisdiction. Later this Bureau, following the decision in the March case, determined that a person falling off a yacht in the Hudson Biver was not within the scope of the State Compensation Act, Novack v. Union Petroleum Products Co., 16 N. J. Mis. R. 393; 200 Atl. Rep. 738.

In Davis v. Department of Labor of the State of Washington, 317 U. S. 249; 63 S. Ct. 225, the facts were briefly these: A drawbridge was being dismantled in the State of Washington over navigable waters. A tug, a derrick and a barge, all licensed by the United States Bureau of Navigation, were used in the dismantling of the drawbridge. The steel beams were lowered by the derrick to the barge which was moored to the bridge, and then the barge was towed up the river to a point where the beams were being stored, and the barge brought back again, and so forth. A workman on the barge, while beams were being lowered, was killed. Compensation was sought under the state statute and after much litigation the matter reached the United States Supreme Court, which held that the state court had jurisdiction.

In the more recent case of DeGraw v. Todd Shipyard, 134 N. J. L. 315; 47 Atl. Rep. (2d) 338, decided after the opinion of the Davis case (supra,),, it was determined that a workman injured in removing pipe lines in a ship in dry dock necessary for the reconversion of that ship from one type of usage to another, was entitled to compensation benefits under the state act and that relief was not exclusive under the federal statute. The principle enunciated is where the employment, although maritime in character, pertains to local matters having only an incidental relation to navigation and commerce, the rights and liabilities of the parties, as between themselves, may be regulated by local rules which do not work material prejudice to the characteristic features of the general maritime law or interfere with its uniformity.

Another case where an alleged conflict of state and federal jurisdiction was, considered is that of Shore Fisheries v. Unemployment Compensation Commissioner, 127 N. J. L. 87; 21 Atl. Rep. (2d) 634. In that case, a pound fisherman, whose duties were to go from the beach by boat to a fish pound approximately two miles off shore and then return, sought the benefits of state legislation. He was hired by the Shore Fisheries, and the question of his eligibility to benefits under the State Employment Act was under consideration. Our court held that whatever duties he performed, in navigation were the means to accomplish the primary purpose of catching fish, and all of his duties were performed within the territorial limits of Hew Jersey—that is, no farther than two miles off shore—and inasmuch as he was not hired by the captain of the boat, and signed no articles of an agreement, the matter was purely a local matter in so far as the State of Hew Jersey was concerned and that the state legislation was not inconsistent with the federal legislation.

■The question to be determined is whether the work of the decedent at the time of the accident bore such relation to navigation or commerce within the meaning and intent of the general maritime' laws so as to give exclusive jurisdiction to the federal courts, or whether his labors bore only an incidental relation thereto so that the rights between the,parties may be regulated under the state law without material prejudice to-the characteristic'features of the general maritime law or interfere with its uniformity.

The services of the decedent were rendered in connection with a contract between the respondents for entertainment, and the operation of the boat by him was an integral and necessary part of the water circus being staged at the Steel Pier for the entertainment of all persons who paid the admission price to visit the pier and see the performance. Without some means of transporting the performers over the water or retrieving them from the water, the show could not proceed. The pier was “~E” shaped,, the audience sitting on one of the prongs, and the participants performing either on the other prong into the water or in the water area between the prongs. Prom these facts, it quite clearly appears that the primary purpose of the operation of the boat in that restricted area and within a few hundred yards from shore, was the furnishing of entertainment for patrons of the pier. Even though navigational in nature, it does not in my opinion constitute navigation or commerce within the meaning and intent of the general maritime law, but rather a very definite and limited local use merely incidental thereto. Nor am I able to comprehend in what manner the jurisdiction over the compensation petition by this court will work material prejudice to the characteristic features of the general maritime law or interfere with its uniformity. There is nothing to indicate that the decedent operated the boat in any other place or for any other purpose, nor suggestion of any other contemplated operation. Having reached the determination above indicated, I cannot concede that this case is one which falls within the borderline or twilight zone, referred to in the Davis case. But even if such were so, I see no conflict between state and federal statute, as it would not be a case clearly within maritime jurisdiction.

The motion to dismiss for lack of jurisdiction is denied. The case may be relisted for further hearing on the issues not embraced within the stipulation of the facts upon which this motion was submitted.

E. Wayne Kkaet,

Deputy Commissioner.


author: Van Winkle, A. M.

text:
    August Schneider, petitioner, v. Catherine Schneider, defendant.
    [Decided April 22d, 1947.]

      Messrs. Weitz & Lasser (Mr. Carl Weitz, of counsel), for the petitioner.

      Messrs. Burlce, Sheridan & Hourigan (Mr. John J. Joel, of counsel), for the defendant.
   Van Winkle, A. M.

(1) The husband sued the wife for a divorce on the ground of desertion alleged to have begun in March, 1944, whereupon the wife counter-claimed for separate maintenance. The parties were married on April 21th, 1943. The husband is about forty-four years old and the wife is about eight years younger. The wife has a child now ten years old by a former husband who lived with the parties during the time that they lived together.

The child of a wife by a former husband is not within the purview of our separate maintenance statute (R. S. 2:50—39) which provides Cor the separate maintenance of a wife and children of the parties; and so the counter-claim of the wife in this case does not pray for the maintenance of her child by her former husband.

The husband, with little command of the English language, testified that there was trouble with the wife about the child beginning two weeks after the marriage. “She say to me, I have nothing to say about the child, that’s not my child, I am not the father from that child. She got very hot temper, and she called me * * * [abusive names] * * * She got mad, mad, pulled me on hair, left and right on the face * * * I said to my wife, please tell Marie to wash the hands and the face to start eat. She tell me * * * [abusive names] I am not the father.” Further, ho testified there were arguments about his giving money with which to buy clothing for the child; that the wife asked him to adopt the child and that he refused to do that. “I said no, I cannot be father from that child here. She tell me all right, get out, called me dirty names again.” While the wife did not specifically deny any of this testimony, she did testify that the husband’s drinking was the cause of all the trouble.

The husband and wife separated, after which they again lived together. They finally separated, as the husband testified, on March 27th, 1944.

(2) The separation of husband and wife is disfavored, and when they are living in a state of separation, and neither has committed a matrimonial offense warranting a divorce, each has a right to terminate the separation. "Upon a husband making a Iona fide effort for a resumption of marital relations in a marital home to be provided by him he is not to be held as consenting to or acquiescing in a continuance of the separate living. If the wife refuses a tona fide offer of the husband to resume marital living in a marital home, she thereupon becomes a deserter; and she is not to have a decree for separate maintenance.

(3) In this case the husband has made tona fide efforts for a resumption of marital relations in a marital home to be provided by him, but the wife, while professing a willingness to so live with him, has continuously refused and still refuses to do so unless the husband permits her child by her former husband to live in any marital home as before.

Counsel for the wife contends that because the husband on his marriage voluntarily received the child into the marital home and there maintained it during the period that the husband and wife lived togéther, that now—although the husband and wife have been living separately for several years and the child has been with the wife for all of the separation period—that the wife has a right' to refuse, as she does, to live with the husband unless he consents, as he does not, that the child shall live with her in any marital home as before as one of the family, so to speak. And, further, that, because the husband does not so consent, the wife is entitled to a decree for. separate maintenance.

However, while the living of the child with the husband and wife, as before, as one of the family, so to speak, would inevitably result in the husband’s maintaining the child, counsel has presented no argument concerning this feature.

In formulating the very general ■ argument of counsel for the wife, that it might be precisely dealt with and disposed of, it was found to rest on assumptions for which the law gives no support and concerning which there is comparatively little in the law books, as should be expected, and concerning which there is nothing in point in Hew Jersey except a definition which is hereinafter stated.

These assumptions are (1) that a legal duty rests upon the husband as a step-father to receive and maintain the child in any marital home, and (2) that the husband now stands in loco parentis to the child and so is under a legal duty to receive and maintain the child in any marital home.

(4) A step-father, as such, is under no obligation by the English common law, to maintain a child of his wife by a former marriage. (See Cooper v. Martin, 4 East 76; 102 Reprint 759; Stone v. Carr, 3 Esp. 1; 170 Reprint 517; Tuff v. Harrison, 4 T. R. 118; 100 Reprint 926.)

Other-state decisions on the subject, a number of which are collected in a footnote in Corp. Jur., tit. "Parent and Child,” § 182, show that the American common law is to the same effect. The law allows a step-father to refuse to provide for a step-child or to take it into his family. (See Chicago M. School v. Scott, 157 Ill. App. 350.) If a step-father voluntarily accepts into his family a child of his wife by a former husband and assumes the obligation of a parent for maintenance, the obligation continues only as long as he permits the child to be in the home. (See Capek v. Kropick, 21 N. E. Rep. 836; 129 Ill. 509.)

(5) The Hew Jersey definition of a person in loco parentis is found in Brinkerhoff v. Merselis (1855), 24 N. J. Law 680, namely:

“The proper definition of a person in loco parentis to a child is, a person who means to put himself in the situation of the lawful father of the child, with reference to the father’s office and duty of making provision for the child. 3 Mylne & Cr. 359; Powys v. Mansfield, ex parte Pye, 19 Vesey 154; or as defined by Sir William Grant, master of the rolls, it is ca person assuming the parental character and discharging parental duties.’ Wetherby v. Dixon, 19 Vesey 412.”

And in giving the definition our court, as we see, gave also the old English authorities on which it rested the definition. This definition was adopted in this court in Mott v. Iossa (1935), 119 N. J. Eq. 185 (at p. 188).

We see that under this definition that the husband in this case must mean to act in loco parentis toward his wife’s child by a former marriage before he may be held to have assumed the burdens of that relationship. The relationship does not exist unless it is self-imposed. The burden may not be thrust upon him by his wife’s demand. lie is not to be forced into the relationship against his will.

Professor Pomeroy in his 2 Eq. Jur. (4th ed.) 1027, § 556 and note, discussed and endeavored to fix the true legal significance of the term in loco parentis; and in his full note he gave the result of his examination of the English cases referred to by our court in Brinkerhoff v. Merselis, supra, one of which cases had been decided by Lord Eldon. “Lord Eldon has given to the expression in loco parentis a definition which I readily adopt” wrote Professor Pomeroy, “because it seems to embrace all that is necessary to carry into effect the object and. meaning of the rale. He says it is a person meaning” (the italics are Professor Pomeroy’s) “to put himself in loco parentis—in the situation of the person described as the lawful father of the child; but this definition must, I conceive, be considered as applicable to those parental offices and duties to which the subject in question has reference, namely, to the office and duty of the parent to make provision for the child. The offices and duties of a parent are infinitely various, some having no connection whatever with making a provision for a child; and it would be most illogical, from the mere exercise-of any of such offices or duties by one not a father, to infer an intention in such person to assume also the duty of providing for the child. The relative situations of the friend and of the father may make this unnecessary and the other benefits most essential. Sir William Grant’s definition is ‘a- person assuming the parental character or discharging parental duties,’ which may seem not to differ much from Lord Eldon’s; but it wants that which, to my mind, constitutes the principal value of Lord Eldon’s definition, namely, the referring to the intention, rather than the act of the party.”

In this ease, any discussion of the term in loco parentis and its application, must have relation to the wife’s condition that she will not live with the husband as a wife in a marital home to be provided by him unless he consents that the child shall live there too. In short, the husband is thus called upon to act in loco parentis to the child at least so far as maintenance is concerned. However, as we have seen, a person in loco parentis is one who means to put himself in the situation of a lawful father of a child with relation to the father’s duty of making provision or maintenance for the child. (See Brody v. Jones & Loughlin (1941), 149 Pa. Super. 602; 21 Atl. Rep. (2d) 437.

Counsel for the wife does not consider that the relationship in loco parentis may be temporary so far as maintenance is concerned. Assuming that the relationship once existed in this ease, it has not continued to exist and it may not again exist without the husband meaning that it shall exist. “Loco parentis has to do with custody, liability to support, and the like, and is temporary in character, and is not to be likened to that of adoption. The one is temporary in character, the other permanent and abiding. (See In re McCardle’s Estate (1934), 95 Col. 250; 35 Pac. Rep. (2d) 850.)

(6) The justification advanced by the counsel for the husband for refusing to receive the child into any marital home of the husband and wife was that the child was a third party whose presence in any marital home would jeopardize the harmony of the marital relationship. This contention has not been considered by me because of the conclusions that I have come to as expressed herein.

(7) The husband’s petition for divorce is to be dismissed because he has not borne the burden of proof as to the continuity of the alleged desertion. The wife’s counter-claim for separate maintenance is also to be dismissed, but, because of the circumstances, the dismissal may be without prejudice if counsel for the wife so desires.


author: Clapp, A. M.

text:
    Essex County Orphans Court.
    IN THE MATTER OF THE ESTATE OF CHARLES W. OATHOUT, DECEASED.
    Decided March 22, 1947.

      For the accountant, Emerson, Emery & Danziy (Sigurd A. Emerson and Charles W. Kappes, Jr.).

    For the exceptants, Harry Lane, Jr.

   Clapp, A. M.

By this motion to strike exceptions to an account, I am asked to decide a question suggested but not answered in Pollack v. Bowman, 139 N. J. Eq. 47; 47 Atl. Rep. (2d) 881, namely, whore investments retained in a trust are listed in a schedule to an account, is the decree, entered on the account by default, res judicata, as to a charge that in retaining them the accountant had been willfully unfaithful to his trust.

An intermediate account of the Fidelity Union Trust Company as trustee under Charles W. Oathout’s will was allowed by decree of this- court in 1938. In Schedule A of the account—the papers filed in the 1938 proceeding are before me by agreement of counsel—appears a list of the trust assets then on hand, including this item:

Carrying Value
Market Value as of May AS, 19S8 [date of the account]
228 shares Fidelity Union Trust Company, common, $10 par incorporated in the State of Hew Jersey. Dividend reductions are reflected in the following record: On $25 par shares $5.50 paid in 1932; $1 paid in 1933. On $10 par shares $0.10 paid in 1934. $1.20 per year paid in 1935 and 1936. $0.75 paid semiannually in 1937 and to date in 1938 ................... $44,688.70 $5,700.00

By the third exception to the trustee’s final account now before the court, the exceptants in effect charge it with having, designedly for its own benefit, retained in the trust since the testator’s death 228 shares of its stock, although it knew the “stock was an improper investment * * * subject to an extraordinary diminution in value.” The trustee moves to strike this and other exceptions as insufficient in law, contending, inter alia, that the 1938 decree is res judicata as to the issue raised by the third exception.

Pollack v. Bowman, supra, held that where investments retained in a trust axe listed in a schedule to an account, the decree settling that account is res judicata as to any exception which might have been taken because of negligence in retaining them; it distinguished a matter of self-dealing. Shearman v. Cameron, 78 N. J. Eq. 532; 80 Atl. Rep. 545, held a decree on account res judicata as to a matter of self-dealing which had been somewhat alluded to in one of the charges in the account; but apparently there was no claim there of infidelity to the trust. Self-dealing, be it observed, is not so gross an offense as that charged here; the rule as to self-dealing is grounded, not upon a supposition of actual infidelity, but upon the principle that it would be insufferable to allow a fiduciary to put himself in a position where he may be led into temptation in that regard.

I find neither authority, nor analogy for limiting the conclusiveness of a decree, so as to hold it res judicata as to negligence but not as to bad faith. The doctrine of res judicata admits of no exception because of the monstrousness of the misdeed allegedly involved in the adjudication, provided the parties in interest have been accorded a fair opportunity to be heard on the matter.

There can be no question here but that the above item in Schedule A of the 1938 account apprised the exceptants of the self-dealing or, rather, self-involvement here; the trustee by that item asserted that it was retaining its own stock in the trust. Rothenberg v. Franklin Washington Trust Co., 129 N. J. Eq. 361; 19 Atl. Rep. (2d) 640. The question I am met with is whether the issue of good faith was tendered in the 1938 proceeding; for an estoppel by decree does not arise, aside of the issues raised in the record. Munday v. Vail, 34 N. J. L. 418. The paramount object of a proceeding on account is to settle the liabilities of the accountant to the estate in his charge. In the entry on the schedule disclosing the accountant’s retention of its own stock, not merely its negligence, but surely its good faith also was drawn into issue. Pollack v. Bowman, 23 N. J. Mis. R. 73, 76; 41 Atl. Rep. (2d) 253.

The exceptants failed to except to the 1938 account; and the decree on the account discharged the trustee from any alleged liability as to the matter of good faith, existing prior to the date of the account. Pollack v. Bowman, 23 N. J. Mis. R. 73; 41 Atl. Rep. (2d) 253; Cf. Brown v. Fidelity Union Trust Co., 135 N. J. Eq. 404; 39 Atl. Rep. (2d) 120; annotated in 67 N. J. L. J. 400. Since that date, the stock in question has risen in value; and the accountant therefore cannot be surcharged because of its conduct since then.

It may be, as exceptants suggest, that to set up an extrajudicial estoppel as to a breach of trust, the cestui que trust must not only have been informed of the facts but also have knowm and deliberately waived his legal rights. Pollack v. Bowman, 139 N. J. Eq. 47; 49 Atl. Rep. (2d) 881, supra. However, to erect an estoppel by decree, a fiduciary, when accounting, is not obliged to render an account of the law involved. In re Weir’s Will, 182 Misc. 845; 46 N. Y. Supp. (2d) 551, 556. Hor, in the very nature of things, should the decree be held conclusive only where the accountant can establish that the respondents deliberately chose to abide by it.

This disposes of the third exception. By the second exception, it is alleged that in retaining its stock since the testator’s death as above stated, the trustee—even though it acted in good faith and with due care—violated its duty of undivided loyalty. The law in this state is contrary. In re Griggs, 125 N. J. Eq. 73; 14 Atl. Rep. (2d) 59; affirmed, 127 N. J. Eq. 362; 12 Atl. Rep. (2d) 705; In re Riker, 124 N. J. Eq. 228; 1 Atl. Rep. (2d) 213; affirmed, 125 N. J. Eq. 349; 5 Atl. Rep. (2d) 685. Besides it follows a fortiori from the principles stated, that the decree on account entered in 1938 is res judicata as to this issue.

That decree is res judicata upon another issue raised in the second exception, namely, whether an undue portion of the assets of the trust was invested in the trustee’s stock; this too was an issue, plainly tendered by the 1938 account.

Exceptants, remaindermen, are unaffected by allowances prayed for out of income; and hence the fourth, fifth and seventh exceptions fall. The sixth, seventh, eighth and ninth exceptions fall for several reasons, among others, because they do not state specifically the reasons for the exceptions, nor in some respects do they state the “items and particulars objected to.” Orphans Court Rule 26; N. J. S. A. Tit. 2, Appendix. Moreover as to the ninth exception it should be noticed that where a decree on account is impeachable because of fraud in the procurement or for other cause, it is not subject to collateral attack by means of an exception to a later account; it must be attacked directly on a petition to open up the decree. In re Slater’s Estate, 88 N. J. Eq. 296, 301; 102 Atl. Rep. 384.


author: Smith, J okeph L., 0. C. J.

text:
    EVA HOELZEL, PLAINTIFF, v. GEORGE GAVALAS AND WILLIAM S. MASKALERIS, DEFENDANTS.
    Decided March 10, 1947.
    For the plaintiff, Robert Carey, Jr.

    For the defendants, Pomerehne, Laible <& Kautz (Rubaclc & Attach, of counsel).
   Smith, J okeph L., 0. C. J.

This matter was a suit on two bills of exchange wherein the defendants, among other defenses, claimed certain credits by way of set-off. The trial resulted in a verdict for the plaintiff.

Certain credits, as claimed by the defendants, were allowed as a set-off. The question of interest was reserved by consent of counsel at the trial, for determination by the court. The specific questions now to be decided by the court are: (1) Ts this such a liquidated debt as to bear interest in view of the credits allowed by the jury? (2) If so, for what period of time should interest be allowed?

The first question must be answered in the affirmative. The general rule is that where a claim under an agreement is certain and liquidated or is ascertainable but because of the allowance of an unliquidated set-off or counter-claim it is reduced, interest is allowed on the balance found to be due. Pearson v. Ryan, 42 R. I. 83; 105 Atl. Rep. 513; Healy v. Fallon, 69 Conn. 228; 37 Atl. Rep. 495; Hansen v. Covell, 218 Cal. 622; 24 Pac. Rep. (2d) 772; Loomis v. Gillett, 75 Conn. 298; 53 Atl. Rep. 581; Childs v. Krey, 199 Mass. 352; 85 N. E. Rep. 442; J. Purdy Cope Hotel v. Fidelity-Phenix Fire Insurance Co., 126 Pa. Super. 260; 191 Atl. Rep. 636. See, also, annotations in 3 A. L. R. 808; 89 Id. 678. The rule is stated in 22 Cyc. 1514, § d, 10, as follows: “Where the amount of the demand is sufficiently certain to justify the allowance of interest thereon, the existence of a set-off or counter-claim which is itself unliquidated will not prevent the recovery of interest on the balance of the demand found due from the time it became due.” Section 337 of the Restatement, Contracts, provides “a. Where the defendant commits a breach of a contract to pay a definite sum of money, or to render a performance, the value of which in money is stated in the contract or is ascertainable by mathematical calculation from a standard fixed in the contract or from established market prices of the subject-matter, interest is allowed on the amount of the debt or money value from the time performance was due, after making all the deductions to which the defendant may be entitled.” New Jersey is in accord with the general rule. The John Agnew Co. v. Board of Education of Paterson, 83 N. J. Eq. 49; 89 Atl. Rep. 1046; affirmed, 83 N. J. Eq. 336; 90 Atl. Rep. 1135; Brown v. Home Development Co., 129 N. J. Eq. 172; 18 Atl. Rep. (2d) 742.

Having determined that the plaintiff is entitled to interest we now come to the question of the period of time that interest should be allowed. Generally interest accrues as a matter of law from the time a liquidated claim is due in the absence of an agreement to the contrary. 33 Corp. Jur. 210, § 70; Ruckman v. Bergholz, 38 N. J. L. 531; Adams v. Adams, 55 N. J. Eq. 42; 35 Atl. Rep. 827; Scudder v. Morris, 3 N. J. L. 13; Howell and White v. Burnett, 20 Id. 265. In the ease of Ruckman v. Bergholz, supra, Chancellor Runyon commenting on the general rule with regard to interest said (at p. 533) : “there may be circumstances which will render the application of the rule inequitable, and by which it will be controlled, but it does not appear that in this case the attention of the judge was called to any such circumstances.” The evidence in this case reveals that the bills of exchange became due oil May 29th, 1935, and on February 5th, 1936, respectively. Counsel for the plaintiff has waived interest for the period of time prior to February 5th, 1936. Summons issued in the cause on May 28th, 1941, and subsequently the case was at issue and awaiting assignment of a trial date. The case was in the call for November 20th, 1942, and was placed on the Military List.

It now appears from the facts submitted and agreed to by counsel that the reason it was placed on the Military List was due both to the fact that the counsel for the plaintiff was in the armed forces and also that counsel for the defendant had a witness who was unavailable on account of service in the armed forces so that the reason for the case being on the Military List, was due to both the plaintiff and the defendant causing it to be placed on the Military List due to the military service of parties at interest of both the plaintiff and defendant.

On January 11th, 1946, the case was removed from the Military List and placed on the trial list. The prevailing rule is that where a cause of action has been in litigation during the war the period of the war is not to be excluded in computing the interest recoverable as a measure of damages. 30 Am. Jur. 44, § 54. New Jersey has not always adhered to this general rule as can be seen from the case of Mease v. Stevens, 1 N. J. L. 433, in which in an action of debt on a bond, interest was deducted for the period of the Revolutionary War and in Le Branthwait v. Halsey, 9 Id. 3. In the latter case, Chief Justice Ewing (at p. 7) said: “The trite adage that money is worth its interest, which is sometimes true and at other times not, depending always on circumstances, did not fix the charge. The principle of these cases is that where payment is prevented by the interposition of the law or the act of the creditor, interest is not recoverable.” We are not here concerned with the period of the recent war as such in the computation of the time during which interest should run but rather with the time during which trial was delayed due to the fact as above stated, the parties were in the armed forces.

If it appear from the stipulated fact, and it does not, that this case was placed on the Military List on account of the military service solely by the plaintiff’s attorney, then we would have a different question. I would have approached that question somewhat along the following lines. Of course, it is true that the defendant could have paid the sum due into court, according to rules 59 and 60 of the Supreme Court. It is also true that other counsel could have been engaged to bring this case to trial on behalf of the plaintiff. The present counsel for the plaintiff did have a law firm take over his files and his legal work. Other counsel could have tried this ease. Ho claim is made by plaintiff’s attorney that the case was so involved or that any special knowledge of plaintiff’s counsel required that this particular attorney actually -try the case. It was simply a matter of proof on two bills of exchange. It would seem at this time that there was no valid reason why this case should have been held on the Military List, but apparently it was held there by the consent of both the plaintiff and defendant.

I would like to bring counsel’s attention to the case of John Agnew Co. v. Board of Education of the City of Paterson, supra, 83 N. J. Eq. at p. 67; 89 Atl. Rep. 1054, where Vice-Chancellor Stevenson said: “It is well said in 16 Am. and Eng. Encycl. L. 922, that There is no subject in the law with reference to which there is greater conflict and confusion in the eases than that of interest.’ Unless a case can be found which is a conclusive authority establishing a precedent the safest way for a court of law or equity is to decide all questions pertaining to interest according to the plainest and simplest considerations of justice and fair dealing. * * * It should be borne in mind that the whole tendency of courts of law and courts of equity, for a considerable period of time, has been to break away from hard and fast rules and charge and allow interest in accordance with principles of equity, in order to accomplish justice in each particular ease.” The principles laid down in this case are still the law to-day. See Brown v. Home Development Co., supra; Stout v. Sutphin, 132 N. J. Eq. 583; 29 Atl. Rep. (2d) 724. The allowance of interest is controlled by the circumstances of each case in law as well as in equity. Metler v. Easton and Amboy Railroad Co., 37 N. J. L. 222; Ruckman v. Bergholz, supra.

The public policy of this state, and this is simply an observation that the court desires to make, apparently favors the suspension of interest during the time of war. In Mease v. Stevens, supra, Chief Justice Kinsey speaking with reference to the Revolutionary war (1 N. J. L. 435) said: “Verdict for the plaintiff, $2,000, debt and interest, deducting interest for four years and five months, on account of the war, agreeably to the uniform rule.” In Le Branthwaite v. Halsey, Chief Justice Ewing (at p. 7) said: “The legislature of our state prohibited the recovery of interest on certain debts during a portion of the Revolutionary period. The prohibition and the reason of it, will be found in the eighth section of the Act of 8th December, 1784, Patt. 59, by which it was enacted. ‘That in all debts contracted before or during the late war, no interest shall be allowed on the demands of any creditors from the 4th of July, 1776, to the 3rd of December, 1783, by whose conduct the non-payment of such demands has been occasioned, whether the same was owing to their removing or remaining within the -lines of the enemy, or places in their possession, or to any other act of such creditors, by which their debtors were prevented from discharging their obligations.’ ”

I am naturally, therefore, constrained, from the proof before me, and by stipulation and the evidence that interest will necessarily have to bo allowed from February 5th, 1936, therefore, the postea as submitted, as there is no objection to same, will be signed by this court.