text:
    New Jersey Department of Labor, Workmen’s Compensation Bureau.
    ELIZABETH ROSA, PETITIONER, v. MORRIS KAPLAN, INDIVIDUALLY AND TRADING AS MODEL DRESS MANUFACTURING CO., RESPONDENT.
    Decided March 26, 1941.
    For the petitioner, Barney Asarnow.

    For the respondent, George E. Meredith.

   It appears from the testimony that the petitioner was employed by the respondent, who maintained his place of business on the second floor of a “loft building” occupied in common with several other manufacturers. The petitioner’s working day started at eight-thirty A. si., and at eight-twenty-five A. si., on April 5th, 1939, the petitioner was walking through a driveway, which was used in common with the- workers for these various concerns, and was a few feet from the entrance to the building, when she. turned over on her right foot twisting her ankle. With the help of a fellow ivorker, she went to her place of employment, and although she attempted to work, she found that she could not do so because her back ached and she felt generally miserable. After about an hour she was taken to her home.

The petitioner remained at home, and later in the day she was examined by Dr. Shapiro, who strapped her back. The following day, that is on April 6th, 1939, the petitioner started to bleed, and Dr. Huberman was called in to see the patient on April 11th. On that date Dr. Huberman found the patient suffering from vaginal bleeding, tenderness over the left ovarion region, and pain over the sacrum and sacroiliac region.

Hi ^ H« H« H* H*

There are two questions presented in the case. First, did the petitioner meet with an accident arising out of and in the course of her employment? Secondly, what disability, if any, has the petitioner suffered by virtue of this accident?

The first question I resolve in favor of the petitioner. As I stated in the memorandum which I filed under date of October 25th, “I am satisfied and find that at the time of petitioner’s accident she was at a place where she had a right to be at a time when she was reasonably within the circle of her employment. This accident happened while she was on her way to work and in an entrance which she had a right to use with the knowledge and consent of her employer.”

The second question for me to decide must, in turn, be broken down into two factors, and it is necessary for me to determine what disability the petitioner presents as the result of her back injury, and the amount of disability due to the pelvic disorders which were described at length by the physicians, and I must, in turn, determine whether either or both of these conditions were caused by or related to the accident in question.

As I have already indicated, I have made a very careful study of the medical testimony presented in this case, and I conclude that the pelvic disorders manifested chiefly by the vaginal bleeding as described by the doctors was in no way related to this accident. In the first place, the petitioner relies on the theory that a rupture of a varicose vein in the left broad ligament produced the vaginal bleeding. I cannot subscribe to this theory for the reasons stated by Dr. Horton, and in view of his demonstration of the situation while on the witness stand. As Dr. Norton stated, and I so find, a ruptured vein in that area cannot conceivably cause a bleeding hemorrhagic, in character, through the vagina. As the doctor testified, the only portal of entry into that cavity would be through the fallopian tubes, which he stated have a diameter about one-fifth the thickness of the lead in a pencil. The doctor testified that it would be physiologically impossible for a sufficient quantity of blood to escape in this manner and cause a profuse hemorrhage.

I am much more impressed by the theory of Dr. Norton to the effect that the bleeding was undoubtedly caused by the pre-existing condition described by the doctors as an erosion of the cervix. The doctor stated that bleeding from this cause is very common, but if it had any relation to the accident, which he doubted in any event, the bleeding would have to occur coincidentally with, or immediately following, the trauma. As the doctor stated, "If there was a definite trauma initiating this thing, there would not be a lapse of twenty-four hours.”

Por the foregoing reasons I conclude and find as a fact that the petitioner suffered from certain internal pelvic disorders prior to her accident, which were neither caused by nor aggravated by the accident in question. I further find from the greater weight and quality of evidence that the bleeding which occurred the day following this accident was probably caused by the previously diseased condition of the cervix, and that this condition caused the bleeding which was spontaneous at that time and totally unrelated to the accident.

While it appears that the petitioner received treatment for ithe above conditions for a period of time, it is also apparent from the evidence that she suffered from a back injury which was variously' described by the doctors as a left lumbar myositis and a left sacro-iliac sprain for a period of approximately twenty weeks. I find that these conditions and the pain in the back were caused by the accident, and that the petitioner was temporarily disabled on that account for a period of twenty weeks. I further find that the back injury resulted in a permanent disability equivalent to five per cent, of total permanent disability.

% % ;¡í ifc ❖ ❖ sfc

It appears from the stipulations of counsel that the petitioner instituted a common law action against the owner of the building where her accident took place. As the result of negotiations on the part of her attorney she received $1,168. From this allowance, according to the stipulations, there was deducted a counsel fee of thirty per cent, or $350.40, and an item of $100 for expenses, a total of $450.40.

As the net allowance of $717.60 received by the petitioner under her third party settlement exceeds the total sum of $579.15, under my findings as above stated I must conclude under the provisions of R. S. 34:15-40 that the respondent herein is released from any liability to the petitioner by virtue of this accident.

* * * it is * * * ordered that the petition be and the same is hereby dismissed without costs to either party.

Harry S. Medinets, Deputy Commissioner.


source: Caselaw Access Project

author: Quinn, President.

license: Public Domain

text:
    State Board of Tax Appeals.
    RIDER COLLEGE, PETITIONER, v. CITY OF TRENTON, RESPONDENT.
    Decided April 1, 1941.
    Bor the petitioner, William J. Egan (by Robert L. Hood).
    Bor the respondent, Louis Josephson.

   Quinn, President.

Petitioner is an institution of higher education, specializing in the fields of business and accounting. The land and buildings wherein it conducts its activities, together with attendant personalty, were assessed as exempt from taxation for the years 1938 and 1939 by the city of Trenton. Bor the year 1940 the assessment was restored as prior to the year 1938 on both real and personal property. An appeal to the Mercer County Board of Taxation, praying exemption from taxation upon the ground that the property was devoted exclusively to the uses of a college or school, not conducted for profit, within R. S. 54:4-3.6; N. J. 8. A. 54:4-3.6, was denied by that body. Hence this appeal.

It is not disputed that all of the requirements for exemption specified in the statute have been complied with by petitioner, except for the proviso that the institution be not conducted for profit. Eespondent contends it always has been conducted for profit, and was during the tax year in question. Our decision of the controversy must be based upon our findings as to the situation existing on the assessing date, October 1st, 1939 (Borough of Longport v. Max and Sarah Bamberger Seashore Home (Supreme Court, 1917), 91 N. J. L. 330; 102 Atl. Rep. 633), ¿¿though evidence of the prior history of the enterprise is admissible, where calculated to cast some light upon the true situation upon the assessing date.

Petitioner was incorporated in 1897 under an act of June 3d, 1890, providing for the incorporation of schools and educational institutions, and its certificate was amended-in 1937, so as to recite under its objects, that the affairs of the college be so conducted that no earnings of the institution should inure to the benefit of any private shareholder or individual.

There are no private ownership interests identified in any way with the college, other than that a note and a mortgage on the property are held by two Trenton banking institutions. It is governed by a board of fifteen trustees, partly self-perpetuating, partly elected by the alumni, and including the president and the dean of the institution, ex officio. The board selects the administrative officers, who in turn conduct the detailed affairs of management of the institution.

It appears that there is a close degree of correlation between the income of the college, which is derived exclusively from tuition fees, and the expenses of operation, including allowances for reduction of principal balances due on the mortgages. It is testified on behalf of petitioner that charges are fixed with no intention of jdelding profits, but in order to meet estimated budgetary outlays for operations and reduction of indebtedness. We think the proofs, as a whole, fairly substantiate these stated objectives. Tuition fees are comparable to those of colleges and universities giving similar courses of instruction. Salaries to officers seem commensurate with the responsibilities and burdens assumed by the administrative and teaching officers, respectively, and if they seem substantial, it must be considered that petitioner has earned for itself a reputation as one of the foremost institutions of its type in the east. Its service to the State of New Jersey is amply attested by the fact that its graduates fill approximately one-half of the secretarial teaching positions in the secondary schools of the state. Results of this type may be deemed to warrant an attempt at insuring their continuance, through the adequate compensation of those entrusted with the conduct of the affairs of the school, without incurring the peril of loss of the statutory tax exemption. Compare the $7,500 salary paid to the president of the school in Westminster^ Choir School, Inc., v. Borough of Princeton, New Jersey Tax Reports 1934-1939, p. 295, with the $8,400 annual salary of the president and .dean in the instant case, charged with the operation of an institution having an annual budget in excess of $300,000.

We recently examined the authorities dealing with the question of what constitutes operation for profit by a school, such as to deprive it of the right to tax exemption (Buxton Country Day School, Inc., v. Township of MilTburn (1940), 18 N. J. Mis. R. 443; 14 Atl. Rep. (2d) 269), and we concluded that from the varying tests laid down in the reported decisions, the underlying criterion upon which the courts appeared to rely most heavily, although not perhaps in every instance articulately, was whether the institution in question gave to the public at large substantially more than it received, “as a public work of service to the state, without expectation of remuneration.” A subsidiary consideration was whether tuition charges were fixed so as to evince a purpose to make a profit over and above the cost of tuition. Institute of Roly Angels v. Bender (Supreme Court, 1909), 79 N. J. L. 34; 74 Atl. Rep. 251; Mayor of Princeton, Sc., v. State Board (Supreme Court, 1921), 96 N. J. L. 334; 115 Atl. Rep. 342. Another point of view was that of inquiring as to whether the objects of the school were “fundamentally charitable or philanthropic.” Dwight School of Englewood v. Stale Board, Sc. {Supreme Court, 1935), 114 N. J. L. 594; 177 Atl. Rep. 875, and cases cited.

From whatever reasonable standpoint the issue is approached, we regard it as established that, whatever may have been the situation in the past, the petitioner institution -was not conducted for profit as of October 1st, 1939, in either the sense of the method by which its charges are fixed, or from the standpoint of its public contributions- to the general welfare. For the school years 1939-1940, the school granted scholarships, of approximately $25,000 in value, to 134 students. The New Jersey Department of Education has acknowledged the high educational standards maintained by it, its students are widely accepted for transfer in other institutions of unquestionable standing, and its graduates as teachers. The Federal Internal Eevenue Department regards the school as exempt from federal taxation, and contributions to it by taxpayers are deductible from income as in the case of contributions to charity, by rulings of that department introduced in evidence.

Despondent has stressed that petitioner makes considerable expenditures in the form of catalogues, advertisements, and for vocational guidance councillors, which, it is asserted, establish the commercial nature of the enterprise. We have given considerable thought to the proof in this regard, since, at first blush, it might seem that a school not conducted for profit would not require the benefits of publicity. Upon mature consideration, however, and considering the case in its entirety, we conclude that the making of reasonable expenditures, fixed in the sound discretion of the trustees and designed to develop public good will toward the college, do not derogate from the non-profit aspect of the enterprise as a whole. Many institutions of undoubtedly exempt status have found it desirable, in a legitimate and non-profit sense, to cultivate favorable public relations, frequently through athletic teams and musical organizations subsidized by the college or school in question. We do not think petitioner’s efforts in this direction are essentially commercial in nature, but merely calculated to promote public good will.

Testimony was adduced by respondent designed to establish discrimination by petitioner against colored students attempting to matriculate therein. This proof did not bear upon the assessing date, and is therefore irrelevant. There was uncontroverted proof of several instances of admission of colored students to the college within recent years.

The judgment of the Mercer County Board of Taxation is reversed, and the assessment ordered canceled.


author: Perskie, J.

text:
    VALENTINE BRAUN, PLAINTIFF-APPELLEE, v. NATHAN WEINBERG, DEFENDANT-APPELLANT.
    Argued January 22, 1941
    Decided April 8, 1941.
    Before Brogan, Chief Justice, and Justices Parker and Perskie.
    Por the appellant, Child, Rilcer, Marsh <& Shipman {Theodore McC. Marsh, of counsel).
    Por the appellee, Slavitt & Slavitt {Arthur Slavitt, of counsel).
   The opinion of the court was delivered by

Perskie, J.

The primary and dispositive question requiring decision is whether, in the circumstances exhibited, an appeal lies from an order making a rule to show cause absolute.

Plaintiff’s complaint alleges that he is the holder of a promissory note made by defendant on May 2d, 1933, in the sum of $1,000, payable three months after date, to the order of Jacob Weinberg; that the note was presented for payment on its due date but payment was refused; and that there is a balance due on said note of $590, plus interest from May 2d, 1933, amounting to $221.25.

Defendant’s answer consists of a general denial and several separate defenses. Slone of the separate defenses is involved on this appeal.

The proofs for plaintiff show that the defendant’s signature as maker of the note was admitted; that plaintiff advanced the sum of $590 for the note to Jacob Weinberg, the payee whose name was endorsed on the back of the note; that the note was offered and received in evidence; and that there was due on said note the sum of $590'plus interest from its- date, amounting to $224.85, or a total of $834.85. Jacob Weinberg is not a party to this suit.

Defendant moved for a nonsuit. The ground urged in support of that motion was that plaintiff had failed to prove the signature of Jacob Weinberg, the payee and endorser. Defendant relied upon the cases of Van Syckel v. Egg Harbor Coal and Lumber Co., 109 N. J. L. 604; 162 Atl. Rep. 627; 85 A. L. R. 300, and Hirsch v. Ollendorf, 117 N. J. L. 404; 189 Atl. Rep. 82. The trial judge granted the motion and judgment of nonsuit was entered.

Thereafter the trial judge on plaintiff’s timely application granted a rule to show cause why the judgment entered should not be set aside and a new trial granted. The ground in support of that rule was that the jrrdgment was contrary to law.

The trial judge by his order under date of June 7th, 1940, without opinion, made the rule absolute and ordered the case be set down for a new trial. It is from that order that the present appeal is taken. Since Jacob Weinberg was not a party to this suit his signature was not put in issue. Hor did the general denial have that effect. Cf. Mechanics Trust Co. v. Halpern, 116 N. J. L. 374, 376; 184 Atl. Rep. 744. See Supreme Court rule 58. The authenticity of Jacob Weinberg’s signature, therefore should have been taken as admitted. R. S. 2:98-3; N. J. S. A. 2:98-3. But be all this as it may, the trial judge had full control over his judgment. Upon timely application and sufficient cause shown, he could, as he did, in the exercise of his sound discretion grant a new trial. Cf. Dorman v. Usbe Building and Loan Association, 115 N. J. L. 337, 340; 180 Atl. Rep. 413, 415.

This brings up plaintiff’s motion in case number seven to dismiss defendant’s appeal. Two grounds are urged in support of that motion. The first is that the appeal was not properly perfected and the second (the only one argued) is that no appeal lies from the “judgment” (inaccurately referred to as “verdict” in the rule to show cause) granting a new trial.

Until there is a final judgment, no appeal lies therefrom. R. S. 2:27-349. The order'under review is not a final judgment. It is an order which clearly rests upon the exercise of the sound discretion by the trial judge. Defendant does not go without day and no abuse of discretion is made to appear. Cf. Heuser v. Rothenberg, 123 N. J. L. 319; 8 Atl. Rep. (2d) 391. No appeal, therefore, lies from the order under review. Benz v. Miller, 12 N. J. Mis. R. 630; 174 Atl. Rep. 167; Kople v. Zalon, 122 N. J. L. 422; 5 Atl. Rep. (2d) 570.

Accordingly the motion in ease number seven is granted. The appeal in case number six is dismissed. Costs to abide the re-trial.


author: McGrath, C. P. J.

text:
    Union County Court of Common Pleas.
    ROSALINO RUMBOLO, PETITIONER-APPELLEE, v. MARY ERB, TRADING AS MARKET TAVERN, RESPONDENT-APPELLANT.
    Decided April 1st, 1941.
    For the petitioner-appellee, Joseph L. Tavormina.

    For the respondent-appellant, Frank J. Burns.

   McGrath, C. P. J.

Petitioner was employed to sweep and clean around the tavern ol respondent, and while sweeping, an argument arose as to what should be done. Petitioner claims that respondent assaulted him and permanently injured him. I have carefully considered the different versions of the affray and other evidence and find as follows:

First: The compensation court has no j urisdiction in a case of this character. Suits for assault could always be brought at common law by employer and employe and there is no reason why the act should cover a case of direct assault by the employer personally upon the employe. Such cases (as this one) usually involve mutual charges of assault and counter-suits and counter-claims and there are, of course, no provisions in the Compensation act for counter-claims or set-offs by the employer; nor is there any provision for adjustment of verdicts as there is in the case where the employe can also recover against a third party or a fellow workman. Obviously, it was not intended that the compensation court should have exclusive jurisdiction over the workman’s claim against his employer for a personal assault. This would leave the employer with no remedy for his claim that the workman assaulted him or would require the employer to sue the employe in the common law court while the employe sued him in the compensation court. It is hardly necessary to suggest the absurdity of such a procedure.

Second: There is nothing to suggest a reasonable risk of assault in what the employe was called upon to do to fulfill his contract of service. An ordinary fight of this kind is not one of the risks of such employment. • The argument obviously arose because the petitioner chose to argue with his employer rather than to obey her reasonable instructions and there is uncontradicted evidence that he had made trouble for her on other occasions and that on this occasion he ran out when she threatened to call the police. It is also significant that the deputy commissioner did not find that there 'was an assault, but only that there was an “accident.”

Third: I find that the weight of evidence brings the case within the rule of Merkel v. Gillespie, 10 N. J. Mis. R. 1081, and recovery should be denied for the same reasons.

It is, therefore, * * * ordered that the petition be dismissed for lack of jurisdiction and failure of proof.


text:
    CITY OF PLAINFIELD, PROSECUTOR, v. STATE BOARD OF TAX APPEALS AND N. J. & S. REALTY CO., RESPONDENTS.
    Submitted January term, 1941
    Decided April 8, 1941.
    Before Brogan, Chief Justice, and Justices Parker and Perskie.
    For the prosecutor, William Newcorn.

    For the respondents, Allan Krieger.

   The opinion of the court was delivered by

Perskie, J.

The question requiring decision on the facts of this cause is whether the State Board of Tax Appeals erred, as claimed by prosecutor, in reducing the assessment on respondent’s land for the tax year of 1939 by the sum of $14,900.

Respondent’s property, designated by prosecutor as Block 100, Lots 2-1A, 181-195 East Front street, is located at the northwest corner of East Front street and Watchung avenue, Plainfield, New Jersey. The lot has a frontage of 72.16 feet on East Front street and a frontage on Watchung avenue 253.4 feet, plus a depth along the westerly line of 233.66 feet wide across the rear thereof on an angle approximately 68 feet in the rear of the lot, facing an additional tract with a frontage on Watchung avenue 127.5 feet deep, with a width across the' rear of 154 feet. The depths of this lot are irregular, the southerly line is 148.03 feet and the northerly line follows the contour of Green Brook to the line in the rear.

On’this land are several buildings. The Union Building, a four-story brick with limestone 'front used for stores and offices, built in 1924, is located on East Front street. Next to this building, on Watchung avenue, is a two-story brick building and adjacent thereto, on Watchung avenue, is a three-story brick building, erected in 1929, and now occupied’ by Montgomery Ward & Co.

For the tax year of 1939, as of October 1st, 1938, the property was assessed, by the local assessors, as follows: Band $124,900, buildings $120,500, total $245,400. On appeal to the Union County Board of Taxation that board affirmed the local assessment. Respondent then appealed to the State Board of Tax Appeals. That body affirmed the assessment on the buildings but reduced the assessment on the land by the sum of $14,900.

Prosecutor challenges the propriety of that reduction. The assessment on the buildings is not involved on this appeal. We have made reference to the buildings and the unchallenged assessment thereon because that assessment as well as the rental income derived frgm the buildings are factors which were considered by the experts in testifying as to the value of the land.

We shall now briefly refer to the proofs to the end of ascertaining whether those proofs persuasively establish that the State Board of Tax Appeals erred, as claimed by prosecutor, in its determination. Tennant v. Jersey City, 122 N. J. L. 174; 4 Atl. Rep. (2d) 395; affirmed, 123 N. J. L. 200; 8 Atl. Rep. (2d) 325; Gannon v. State Board of Tax Appeals, 123 N. J. L. 450; 9 Atl. Rep. (2d) 531.

The testimony adduced before the board and the testimony taken by leave of the court, disclose substantially the following:

Respondent’s property is ideally located in the heart of the business district of the City of Plainfield. It is characterized as a “100 per cent, location.” The tax history of the land shows the following assessments: $93,800 for 1928, $99,425 for 1929, $115,450 for 1930, 1931 and 1932, $131,375 for 1933, $131,400 for 1934 and $124,900 from 1935 to 1939.

For the prosecutor, its assessor, Charles A. Peterson, testified that the land had a value, on the day of the assessment thereof, of $1,730 a front foot, or a total of $120,500. While he testified as to assessed valuations of properties relatively near to the land in question ranging from $1,105 a front foot to $1,318 a front foot, he admitted, on cross-examination, that his valuation here of $1,730 a front was based on comparable sales so long prior to the assessment date that he could not remember when last such a sale had been effected. The fact that he could not specifically point to voluntary sales of other properties in the immediate neighborhood within a reasonable time before and after the statutory date of assessments renders his testimony of little, if any, persuasive value. Atlantic City v. State Board of Tax Appeals, 123 N. J. L. 464; 9 Atl. Rep. (2d) 702. Ooncededly there is no proof of any such sales in the instant case. Thus each party resorted to expert witnesses.

William O. McDowell, an expert, for the city placed a value of $177,907 on the land. He reached that value on the unit form of one foot by one hundred. On that basis he worked out his result as follows:

East Front street frontage 72.16'. Depth and frontage along westerly line of Watchung avenue 253.4'. Basis of value 72.16' x 100' depth @ $1,250 a front foot ... ........'. . . $90,200

Corner influence 25' (31,350 x 20%) ......... 6,250

Watchung avenue frontage 40' x 70' avenue 40' @ $625 a front foot x depth factor .844 ........ 21,100

118' x 70' average 118' @ $350 a front foot x depth factor .844 ................. 34,857

157.5' x 175' average 127.5 @ $200 a front foot. . 25,500

Land value estimate ....................... $177,907

For whatever value it may have, his appraisal report (prosecutor’s Exhibit P-1) discloses a gross income from the properties of $47,684.42 less deductions of $27,503.22, or a net income of $20,181.20. Based on capitalization of the income at six per cent, “Property residual method,” he placed a market value on the .property (land and buildings) of $336,000. On this figure, if we deduct the value of the buildings ($120,500) we have a value of $215,500 for the land.

Por respondent, expert R. M. Kirkland placed a value of $1,500 a front foot on the land or a total value of $108,240. This expert’s report (respondent’s Exhibit 1) of his appraisal of the property shows a gross income of- $39,266 less deductions of $25,692, or a net income of $13,574. On this income, capitalized at six per cent., he placed a value on the land and buildings at $226,233. And expert Herbert Segal, for the respondent, testified as follows: “Based entirely on capitalization, with consideration of- $4,000 annual depreciation and not including any interest charges on liens made for the purpose of carrying the property, or on mortgage loans, I have fixed a value capitalized at six per cent, on the net income of $200,733.66. I didn’t allocate this value as between land and buildings.” On this basis, deducting the unchallenged valuation of $120,500 on the buildings, he gave a valuation of $80,236.66 on the land. All of which rather forcefully shows what can be done with figures.

In light of all that has been written, we are not able to say that the proofs persuasively establish that the State Board of Tax Appeals erred .in its determination. On the contrary, we think that the proofs fairly support the result reached by the State Board of Tax Appeals. We so hold.

Accordingly, the judgment under review is affirmed. The writ is dismissed, with costs.


text:
    ANTONINA KATANEKSKA, ADMINISTRATRIX OF THE ESTATE OF STEFAN KOCHANOWICH, DECEASED, PLAINTIFF-APPELLANT, v. METROPOLITAN LIFE INSURANCE COMPANY, DEFENDANT-APPELLEE.
    Submitted January term, 1941
    Decided April 8, 1941.
    Before Brogan, Chief Justice, and Justices Parker and Perskie.
    For the appellant, Isaac Seiler (Alfred Brenner, of counsel).
    For the appellee, Drewen d Nugeni.

   The opinion of the court was delivered by

Perskie, J.

It is conceded for defendant that the trial judge fell into reversible error in granting its motion for a directed verdict against plaintiff. The sole question is whether the reversal should be with costs or whether it should be with the legend that the costs should abide the re-trial of the case.

The applicable law is settled. The prevailing party in an action, motion or proceeding in the courts of law of this state is entitled to costs unless otherwise provided by law and unless the court or justice or judge before which or whom such action, motion or proceeding shall be taken shall order otherwise. R. S. 2:27-378. In construing this statute, we have held that allowance or disallowance of costs is “within our discretion.” Rosenkranz v. Wolf, 87 N. J. L. 211; 93 Atl. Rep. 584. The exercise of that discretion depends upon the facts of each case. And where, as here, a judgment is reversed by an appellate court, and a new trial is granted for error by the trial judge, and such reversal does not finally determine any contested issue between the parties, costs should not be awarded at law in the appellate court. Reed v. Public Service Railway Co., 98 N. J. L. 356; 126 Atl. Rep. 623.

We are asked here to depart from our general rule as stated in the Eeed case of not allowing costs because it is said that counsel for defendant were not altogether free from blame for the error which was committed by the trial judge and that they were slow to concede that reversible error had been committed. We have carefully examined the facts and the argument upon which the request is rested and fail to see any valid reason for granting it. We think it is clearly without merit.

The application for costs is, therefore, denied. Let the judgment of reversal contain the legend that costs are to abide the result of the re-trial.


author: Smith, Joseph L., S. C. C.

text:
    ANTONIO PETRONE, PLAINTIFF, v. THE CITY OF NEWARK, DEFENDANT.
    Decided April 4, 1941.

      For the plaintiff, Thomas L. Parsonnet.

    For the defendant, James F. X. O'Brien.

   Smith, Joseph L., S. C. C.

This comes on a motion of the plaintiff to strike out the answer filed by the defendant, upon the ground that the said answer is sham and further, that it sets forth no legal defense to the plaintiff’s cause of action. According to the complaint, on May 18th, 1937, the Commissioners of the City of Aewark designated Vincent J. Murphy as director of the Department of Revenue and Finance, by resolution, and that on the first day of December, 1937, the said board assigned and distributed to the Department of Revenue and Finance, the executive, administrative, judicial and legislative authority, relating to the Board of Assessments and Revision of Taxes, also by resolution. This Board of Assessments and Revision of Taxes was created by virtue of an ordinance of July. 28th, 1937. On September 24th, 1940, Vincent J. Murphy appointed the plaintiff as member of the said Board of Assessments and Revision of Taxes, and the proper notice of such appointment was given to all interested parties. Pursuant to such appointment, the plaintiff qualified for the position, took the oath of office, functioned as such and rendered the usual services of that office. Plaintiff sues for his salary under this appointment.

The defendant denies the legality of the appointment, contending that Vincent J. Murphy did not have this power of appointment; that the power of appointment was vested in the Board of Commissioners by law and by ordinance.

There are no disputes as to the facts in the case and a question of law is presented as to whether or not the plaintiff is entitled to his salary.

Plaintiff contends that he was a de jure officer and that his appointment by Vincent J. Murphy was legal and proper. Plaintiff further contends, however, that irrespective of the legality of his appointment, he was, at least, a de facto officer, and that having actually rendered his services, ho is entitled to his compensation during the time in which he has served.

If the plaintiff was a de facto officer, and as such, if he was entitled to his salary for the time during which he rendered service, it becomes unnecessary to pass upon the question of the legality of his appointment. Ordinarily the doctrine of de facto officers applies to the validity of the acts of such officers in respect to the public and to innocent parties. Von Neida v. Bennett, 117 N. J. L. 231; Erwin v. Jersey City, 60 Id. 141 (at p. 144).

However, the doctrine of de facto officers has not been .confined to the validity of the acts of officers, as they affect innocent parties, but has also been applied to the rights of such de facto officers, to compensation for their services; thus, in the Erwin case, supra (at p. 149), Chief Justice Magie says:

“That doctrine, applied to the case before us, requires us to hold that one who becomes a public officer de facto without dishonesty or fraud, and who has performed the duties of the office, may recover such compensation for those services, as is fixed By law, from the municipality which is by law to pay such compensation.”

There are no questions of fraud or dishonesty in the present case; therefore, under the rule of Erwin v. Jersey City, supra, the plaintiff is entitled to his salary for the time in which he has served, if he was a de facto officer. As has been pointed out in the Erwin case, it is difficult to give such a definition to the term de facto officer, as would cover all circumstances; however, the definition given in the Erwin case may safely be followed in the present instance. In that case Chief Justice Magie states (at p. 144):

“When an official person or body has apparent authority to appoint to public office, and apparently exercises such authority, and the person so appointed enters upon and performs the duties of such office, his acts will be held valid in respect to the public, whom he represents, and to third persons, with whom he deals officially, notwithstanding there was a want of power to appoint him in the person or body which professed to do so.”

This brings us to the question as to whether or not Vincent J. Murphy had apparent authority to appoint the plaintiff to his office. Eor the purposes of this case, we are not interested in determining or deciding his actual or legal authority, but only his apparent authority.

It appears from the undisputed facts submitted in the case, that on May 18th, 1937, by resolution, the Board of Commissioners had designated and appointed Yincent J. Murphy as Director of the Department of Revenue and Finance, and on December 1st, 1937, the said board distributed the executive, administrative, judicial and legislative authority relating to the Board of Assessments and Revisions of Taxes, to the director of the Department of Revenue and Finance, except as provided in the said resolution by reference to previous ordinances of the City of Newark, by which ordinances so referred to in the resolution, the Board of Assessment and Eevision of Taxes, consisting of five members had been created, the members to be appointed by the Board of Commissioners.

It also appears that as the result of mandamus proceedings had in our Supreme Court, judgment was entered on the 29th day of April, 1938, ordering the Board of Commissioners of the City of Newark, to assign and distribute, among other things, the supervision of the Board of Assessments and Eevision of Taxes, to certain individual specified department of the city government. As above noted, the plaintiff had been appointed as member of the said Board of Assessments and Revisions of Taxes by Yincent J. Murphy on September 24th, 1940. The judgment of the Supreme Court directing the distribution of the various boards to certain individual specified departments, came after the ordinance and resolution above referred to. Without deciding whether or not, under those circumstances, Yincent J. Murphy had the actual and legal authority to appoint members of the Board of Assessments and Revisions of Taxes, which board had been distributed to him by proper resolution, it appears clear from what transpired, that he had at least the apparent authority to so appoint, justifying the plaintiff to accept such appointment, to act upon it, and to render his services accordingly. The plaintiff having done so, he comes directly under the doctrine expressed in the Erwin case, supra, and is entitled to the compensation for services during the time in which ho acted and served under this appointment.

For the reasons above stated, the motion to strike the answer as in part sham, and in part insufficient in law, will be granted.

An order will be entered accordingly.


text:
    FAITOUTE IRON & STEEL COMPANY, A CORPORATION, AND MOSES W. FAITOUTE, PLAINTIFFS, v. CITY OF ASBURY PARK, A MUNICIPAL CORPORATION, DEFENDANT.
    Decided March 27, 1941.
    For the plaintiffs, Arthur T. Vanderbilt.

    For the defendant, Ward Kremer.

   Smith, Joseph L., S. C. C.

This comes on a motion of the defendant to strike the complaint filed herein as setting forth no legal cause of action. The plaintiffs’ suit is to recover on bonds and interest coupons issued by the defendant, and held by the plaintiff. The grounds set forth in the motion to strike the complaint are that the complaint does not set forth.a legal cause of action; that the complaint does not aver that the plaintiffs have obtained the permission of the New Jersey Supreme Court to institute the present suit; that the defendant has in operation a refunding plan controlling the plaintiffs’ claim; that the plaintiffs are controlled by the terms and provisions of N. J. S. A. 52:27-34 et seq., and that the plaintiffs have not obtained permission of the New Jersey Supreme Court to institute the present suit.

The procedural propriety of the motion is questionable in view of the fact that the complaint, on its face, without the qualification of extraneous matters, does set forth a cause of action, and the grounds stated in the motion would have been stated more properly by way of an answer. However, all the relevant facts are admitted by both parties and coneededly there are no issues of facts to be determined, and solely a question of law is left for determination. Under these circumstances, the court will consider the motion on the merits rather than on procedural grounds.

The defendant concedes the issuance of bonds now held by the plaintiffs; it shows, however, that on or about March 7th, 1935, it, the City of Asbury Park, was placed under the control of a Municipal Finance Commission, pursuant to N. J. S. A. 52:27-1 et seq.; thereafter, a plan for refunding of the bonded indebtedness of the city was filed with the New Jersey Supreme Court, pursuant to N. J. S. A. 52:27-34 et seq., whereupon the Supreme Court assumed jurisdiction over the proceedings.

In due course the court approved the refunding plan, subject to the approval of the plan by eighty-five per cent, or more, in amount of the indebtedness affected by the plan. Subsequently, the necessary percentage of consents was obtained and the plan was put into operation on June 15th, 1938. The contention of the defendant is that the claim or interests of the plaintiffs, are governed and controlled by the said plan. Mr. Justice Perskie, in his order approving the modified plan of adjustment, under date of April 29tli, 1938, states that:

“It [referring to the plan] is not detrimental to other creditors of the municipality.”

The said order also provides that the Supreme Court shall retain jurisdiction over the proceedings, in accordance with the statutes and for the purpose of determining such matters as are provided under the said amended refunding plan for the court’s determination.

The plaintiffs contend that the statute in question, under which the proceedings in the Supreme Court were held, and upon which would be based the defendant’s defense, are unconstitutional.

Under the circumstances stated, it is not necessary to determine the constitutionality of N. J. S. A. 52:27-1,-34 et seq., in so far as the provisions thereof, in abrogation of contractual rights of plaintiffs, are concerned. The statute in question, 52:27-38, provides that the Supreme Court shall retain jurisdiction over the proceedings even after the entry of the order approving the adjustment; that thereafter no creditor shall bring action without the permission of the Supreme Court. In compliance with this statute, our Supreme Court, under the order of Mr. Justice Perskie, has accepted and retained jurisdiction over the proceedings, even as to subsequent actions, “In accordance with the statute in such cases made and provided * * In the face of our Supreme Court having assumed jurisdiction over the matter and having expressly retained such jurisdiction for further proceedings, this court will require compliance with the provisions of that order, and with the provisions of the statute requiring that the permission of the Supreme Court be obtained prior to the bringing of such an action. Such permission concededly lacking in the case, the motion to strike the complaint will be granted; an order will be entered accordingly.


text:
    State Board of Tax Appeals.
    Appeals of 1937 and 1938. WRIGHT AERONAUTICAL CORPORATION, PETITIONER, v. J. H. THAYER MARTIN, STATE TAX COMMISSIONER, RESPONDENT. Appeals of 1937 and 1938. LEHN & FINK PRODUCTS CORPORATION, PETITIONER, v. J. H. THAYER MARTIN, STATE TAX COMMISSIONER, RESPONDENT.
    Decided April 15, 1941.
    For the petitioners, Bussell B. Watson.

    For the respondent, David T. Wilentz, attorney-general (by John Solan).

   Quinn, President.

These appeals were submitted on stipulations of facts, and as they raise identical issues, are disposed of herewith together. They involve the legality of the method of computation employed by the State Tax Commissioner in assessing the foreign corporation franchise taxes due from these petitioners to the state for the years 1937 and 1938, under Pamph. L. 1937, ch. 25 (R. S. 54:32A-1 et seq.; N. J. S. A. 54:32A-1). The section of the act which we are presently called upon to construe is R. S. 54:32A-8; N. J. S. A. 54:32A-8, which, so far as is here' material, is as follows:

“A tax is hereby imposed upon every foreign corporation organized for pecuniary profit, except those corporations specifically exempted by this chapter, for the. privilege of exercising its franchise in this state or for the privilege of doing busines or maintaining an office in this state, which tax shall be measured by, and paid annually upon and with respect to, that proportion of the total capital stock issued and outstanding as of January first in each-year as the gross income from the business done in this state in the same income year bears to the total gross income from its entire business in the income year.”

The particular language disputed is “gross income from the business done in this state.” Both petitioners maintain manufacturing plants in this state, and sell their product manufactured here to customers within as well as out of the state. The taxpayers made tax returns for the years in question, and paid taxes, upon the basis of a construction of the mooted phrase quoted, which limited it to gross receipts from sales to customers having places of business within the state. The. Commissioner audited the returns and assessed additional taxes to the petitioners, proceeding upon a computation of the tax, based upon a construction of the statutory language in question to include within “gross income from the business done in this state,” so much of the selling price of goods manufactured here, but sold out of the state, as represented the manufacturing cost thereof, comprising cost of materials, labor, preparation of product for shipment, and an allocated proportion of overhead. It has been stipulated in both cases that if the inclusion of the cost of manufacturing in the Commissioner’s formula referred to was improper under the act, the additional taxes should be set aside. No question is made as to the correctness of the amounts of tax originally returned by the taxpayers, under their construction of the statute, except that it is contended in the case of Wright Aeronautical Corporation that it is unconstitutionally discriminated against, as a foreign manufacturing corporation having in excess of fifty per cent, of its capital employed in manufacturing in this state, by the assessment of any franchise tax at all, in view of the statutory exemption from such taxes accorded to domestic corporation in such case. R. S. 54:13-7; N. J. S. A. 54:13-7. We will not undertake to pass upon the question of constitutionality in advance of a consideration thereof by the courts, but will assume the validity of the act as written.

At the outset, we think it should be observed that tax statutes should be construed, where possible, in consonance with the popular signification of the language used. Evening Journal Association v. State Board of Assessors (Supreme Court, 1885), 47 N. J. L. 36, 40. Construction not plainly dictated by the legislative language should be avoided, and a taxing statute, particularly (should there be any doubt attending its meaning), must be strictly construed against the state and in favor of the taxpayer. Public Service Coordinated Transport v. State Board of Tax Appeals (Supreme Court, 1935), 115 Id. 97; 178 Atl. Rep. 550; McFeeley v. Commissioner (Supreme Court, 1935), 296 U. S. 102; Old Colony Railroad Co. v. Commissioner (Supreme Court, 1931), 284 id. 552.

But we do not regard the construction of the language in question as attended by any reasonable doubt. We think that the propounding of a proportion based upon the ratio of “gross income from business done in this state,” to “total gross income from entire business,” clearly signifies the proportion of receipts from intrastate sales and service to total receipts, and that the act as written is so understood invariably by the officers and fiscal agents of corporations liable to the payment of the taxes. Whether or not a wise public policy requires that the proportion of gross income from business done in this state bo arranged to include some part of the out of state sales receipts, deemed allocable to the cost of manufacturing in this state, is beside the point. Apt legislative language could have determined such policy without possibility of question. In default thereof, the arbitrary imposition of any such formula by the State Tax Department is unauthorized by the statute. Nor can we regard as fairly tenable the department’s contention that if it is in error in applying its “cost of manufacturing” formula, it is in any event justified in construing the phrase, “gross income from business done in this state,” to contemplate, as included therein, some indeterminate proportion of gross out of state sales, subject to determination by the Commissioner, as a matter of fact in each case, upon the basis of his estimate of the extent to which such receipts could be shown to be derived from intrastate corporate activities other than sales. We cannot find that the legislature intended any such vague and unwieldy standard for computation of the tax, particularly where the language actually used by it possesses a definite and widely understood significance, easy and convenient of application.

The phrase “business done in this state,” has been construed by the United States Supreme Court in Pacific Express Co. v. Seibert (1891), 142 U. S. 339 (at p. 350), as follows:

“This positive and oft-repeated limitation to business done within the state, that is, business begun and ended within the state, evidently intended to exclude, and the language employed certainly does exclude, the idea that the tax is to be imposed upon the interstate business of the company. ‘Business done within this state’ cannot be made to mean business done between that state and other states.”

The phrase has been frequently construed in the same way, and never, so far as our research discloses, as contended for by respondent. Nor does respondent cite a solitary authority in support of its construction of the act. The. argument of petitioners, however, is strongly supported by two recent cases construing an analogous Texas statute. The taxable ratio in that act provided for, is that which “gross receipts from its business done in Texas bear to the total gross receipts of the. corporation from its entire business.” In Clark v. Atlantic Pipe Line Co. (Ct. Civ. Ap. Tex., 1939), 134 S. W. Rep. (2d) 322, there was in issue the construction of the act by the assessing officer of the state, under which “gross receipts from business done in Texas” was considered to include receipts on account of shipments of oil made by the taxpayer, as a common carrier, destined to points out of the state. The court set aside that construction of the act, holding that receipts from “business done in Texas” meant “business begun and completed in Texas, not business begun in Texas and completed in some other state or foreign nation. In other words that it means intrastate business.” Page 328. This decision is clearly in support of the position of the petitioners herein.

The converse of the position taken herein by petitioners was presented by the Texas authorities in applying the same statute as construed in the Clark case, in taxing the Ford Motor Company, a foreign corporation, in Ford Motor Co. v. Clark (C. C. A., 5th, 1938), 100 Fed. Rep. (2d) 515; affirmed, Ford Motor Co. v. Beanchamp (1939), 308 U. S. 331. In that case, the taxpayer, a Delaware corporation, was engaged in the manufacture of automobile parts in Michigan, some of which were shipped to an assembly plant in Texas, and there assembled into completed automobiles and sold to dealers in the State of Texas. The taxing officers determined the tax ratio by applying gross receipts from Texas sales to total sales receipts of the company. The company urged that there should not have been included in the numerator of the ratio fraction that portion of the Texas sales receipts represented by the cost of manufacturing the parts in Michigan and of shipping them to Texas, and that, as construed by the taxing officers, the statute offended both the interstate commerce clause and the Fourteenth Amendment to the United States Constitution. Both the Circuit Court and the Supreme Court held the act to have been properly construed by the state authorities, and valid as so construed. The Circuit Court stated (at p. 517) : “the object of the whole corporate enterprise is to make money. The corporation has made none by manufacture until it sells the product.”

It was held that the entirety of the receipts from sales in Texas constituted “gross receipts from business done in Texas.”

The Supreme Court, in affirming the Fifth Circuit, referred to the statute as based upon a calculation, “by the percentage of sales which are within the state.” The ruling is square authority in support of petitioners' position herein, although in a converse situation. We think that the intrastate sales factor must be determinative in all situations, uniformly, under the act, regardless of where the foreign' corporation's manufacturing plant is located.

Another closely analogous problem was before the Supreme Judicial Court of Massachusetts in Eaton Crane Pike Co. v. Commonwealth (1922), 135 N. E. Rep. 170. The act there involved imposed an excise tax “upon the privilege of conducting intrastate business within our borders in the case of foreign corporations,” and provided for a tax computed upon that portion of the net income of such corporations which is not derived from interstate or foreign commerce, or from business carried on, or property owned out of the commonwealth. The state attempted to tax that part of the net income arising from sales of goods manufactured within, but sold out of the state in interstate commerce, as represented the process of manufacture, that being contended to constitute an intrastate activity. The court sustained the taxpayer’s plea for an abatement of the tax to the extent of its computation upon the basis of manufacturing cost of goods sold out of the state, as follows:

“It is contended that, in determining the net’ income derived frbm the sale of goods in interstate commerce, the entire proceeds from such sales cannot be made the basis of computation of the exemption. This contention if sustained would require the deduction of a part of income actually accruing because of processes happening before the movement of the goods, although the contracts of sale did not contemplate any such apportionment or furnish any measure for so doing. No such deduction in terms is made by the statute.

“If it is assumed that the goods were manufactured for sale without reference to the possibility that they might be sold without the state and that none of the attributes of interstate commerce attached thereto until their actual sale, nevertheless, under these statutes the income derived from such sales is not to be considered in whole or in part as income not derived from interstate or foreign commerce, although largely affected by the conduct of the business as carried on within the commonwealth. * * * The statutes here in question provide no adequate machinery for the separation between the income justly attributable to intrastate manufacture and that attributable directly to interstate commerce. Since the income actually arises from interstate commerce, the law goes no further in differentiation for purpose of taxation."

What the Massachusetts court said about the significance of a failure of express statutory provision for machinery for the separation of income between that attributable to intrastate manufacture and that arising from interstate commerce, is directly in point in the eases sub judice.

Finally, we do not deem the statutory definitions contained in the act of any pertinence in the present connection. “Doing business" is broadly defined in comprehensive language for the purpose of fixing the class of corporations subject to the operation of the act. R. S. 54:32A-2; N. J. S. A. 54:32A-2. See Gaines, Silvey & Nichols, Inc., v. State Board of Tax Appeals (Supreme Court, 1939), 122 N. J. L. 334; 5 Atl. Rep. (2d) 473; affirmed, 124 N. J. L. 128; 11 Atl. Rep. (2d) 28. “Gross income" is defined in such a manner as to prevent diminution thereof on any account, whether gross income from business done in the state, or total gross income. The definition is not directed to the issue of construction before us.

For the reasons stated, we are of the opinion that the assessments of additional taxes against these petitioners by the respondent were illegal, and judgments will be entered setting them aside.


author: Herr, A. M.

text:
    Julia T. Duffy, complainant, v. Francis P. Duffy, defendant.
    [Decided April 9th, 1941.]

      Messrs. Gilhooly «£ Yauch (Mr. Edward Gilhooly), for the complainant.

      Mr. Philip A. Donnelly, for the executors of the last will and testament of Francis P. Duffy, deceased, impleaded as defendants.
   Herr, A. M.

The complainant, Julia T. Duffy, secured a final decree for separate maintenance in this cause on March 20th, 1923, by the terms of which the defendant, Francis P. Duffy, was ordered to pay her the annual sum of $520 in equal weekly installments of $10 each as a suitable allowance for the support and maintenance of the complainant and of a daughter of the marriage, who was then of the age of ten years. The decree contained the express reservation: “And it is further ordered, adjudged and decreed that either party be at liberty to apply, upon a future change of circumstances of the parties, for a variance or modification of this decree, touching said alimony, maintenance and custody, as shall be equitable and just.”

The defendant husband made the weekly installment payments as directed until February 18th, 1933, but it is alleged that he paid none thereafter. He died on May 7th, 1939, leaving a last will and testament which was duly proved on May 18th, 1939. Peter J. Duffy and Philip F. Donnelly qualified as executors. On May 11th, 1940, an order was entered, upon notice to the executors, reviving the action and naming them defendants in their capacity as executors. A petition was thereupon filed by the complainant praying that the court fix the amount of arrearages claimed to be due her under the decree of March 20th, 1923, amounting to $3,240, calculated at the rate of $10 a week from February 18th, 1933, to May 7th, 1939, the date of the defendant’s death.

The defendant-executors have countered with an application for an order discharging the order of revivor and dismissing the complainant’s petition for fixing of arrearages of alimony.

It is argued for complainant that the alleged arrearages under the decree became vested in her as they aceraed, with the force and effect of a judgment for a fixed sum of money, and that the refusal of this court to make such orders as are requisite to enable complainant to have execution therefor amounts to an abuse of discretion. Were this the law the court would to that extent be powerless to apply equitable principles in the administration of its statutory jurisdiction over alimony and maintenance, and would be obliged to act as a mere administrative agency, impotent to prevent its processes from being employed in the furtherance of inequity and injustice. This court has always been most zealous in applying equitable principles to all phases of the marital relationship. The legislature committed these matters to the jurisdiction of the Court of Chancery to the end that equitable principles should be applied. Westcott v. Hinckley, 56 N. J. L. 343; 29 Atl. Rep. 154. The statutory language is (R. S. 2:50-37; N. J. S. A. 2:50-37), “The court of chancery may make such order touching the alimony of the wife, and also touching the care, custody, education and maintenance of the children, or any of them, as the circumstances of the parties and the nature of the case shall render fit, reasonable and just * * *; orders so made may be revised and altered by the court from time to time as circumstances may require,” and (R. S. 2:50-39; N. J. S. A. 2:50-39),. “The court of chancery may decree and order suitable support and maintenance to be paid and provided by the husband for the wife and her children, or any of them, by their marriage, or to be made out of his property and for such time as the nature of the case and circumstances of the parties render suitable and proper in the opinion of the court. The court may compel the defendant to give reasonable security for such maintenance and .allowance and may, from time to time, make further orders touching the same as shall be just and equitable and enforce such decree and orders in the same manner mentioned in section 2:50-37 of this title.”

The two sections are cognate. The one applies in suits for divorce; the other in suits for separate maintenance. It is not perceived that the legislature intended any other distinction to be made between them, and our courts have made no other distinction in administering them.

It would be difficult to conceive language more apt to express the legislative intent that the court shall in all such cases do equity. And as to the remedy the provision is that process, may issue to enforce payment in such manner “as to the said-court shall from time to time seem reasonable and just,” and that the performance of such decrees may be enforced “according to the course and practice of the court of chancery.” -Process of execution to enforce alimony and maintenance decrees does not issue as of course, but only upon the special order of the Chancellor. It will not be ordered unless equitably justified.

As authority for the argument that arrearages of alimony or maintenance under a final decree are vested to the extent that the court cannot deal with them retroactively, complainant cites Bolton v. Bolton, 86 N. J. Law 622; 92 Atl. Rep. 389. That case, however, turned upon the construction of the New York statute under the full faith and credit clause, and is not at all in point here.

The Supreme Court of the United States has had occasion to review the question of the application of the full faith and credit clause to cases involving alimony in a number of cases, notably Barber v. Barber, 21 How. 582; 16 L. Ed. 226; Lynde v. Lynde, 181 U. S. 183; 15 L. Ed. 810, and Sistare v. Sistare, 218 U. S. 1; 54 L. Ed. 905.

The Lynde Case involved the construction of our own statute. Mrs. Lynde secured a decree in this court for a lump sum of $7,840, for alimony accrued from the date of the filing of her petition to the date of the decree, together with a counsel fee of $1,000 and costs of $136.07. The decree also provided that the defendant pay her thereafter the sum of $80 per week as permanent alimony. She then brought suit on the decree in the Supreme Court of the State of New York and recovered a judgment not only for the lump sum, counsel fee and costs awarded to her by our decree, but for the arrearages of weekly alimony accrued from the date of the decree to the date of the institution of the New York action. The Appellate Division of the Supreme Court modified the judgment by reducing the amount of the recovery to $8,840, with interest and costs, eliminating the amount of the arrearages accrued under the prospective portion of the decree, and as thus modified the judgment was affirmed by the New York Court of Appeals, and again affirmed by the United States Supreme Court. Tor a history of the litigation, see Lynde v. Lynde, 64 N. J. Eq. 736; 52 Atl. Rep. 694.

In the opinion of the United States Supreme Court in the Lynde Case (181 U. S. 183, 187; 45 L. Ed. 810, 814; by Mr. Justice Gray), it was said:

“The decree for the pa}onent of $8,840 was for a fixed sum already due, and the judgment of the court below was properly restricted to that. The provision for the payment of alimony in the future was subject to the discretion of the Court of Chancery of New Jersey which might at any time alter it, and was not a judgment final for a fixed sum.”

In the Sistare Case Chief-Justice White reviewed and distinguished the decisions in the Barber and Lynde Cases, reaffirming the holding of the Lynde Case that under the New Jersey statute a decree for alimony payable in future (as distinguished from a decree for a lump sum for alimony already accrued) may be modified at any time by the court with retroactive effect, and hence is not a final decree for the payment of definite and fixed amounts of money. In the opinion he says:

“The reasoning expressed in that ease [Lynde] was based solely and exclusively on the ground that portions of the decree for alimony which were held to be not within the purview of the full faith and credit clause were not so embraced, because their enforcement Vas subject to the discretion of the Court of Chancery of New Jersey, which might at any time alter it * * In other words, the ruling was expressly based upon the latitude of discretion which the courts of New Jersey were assumed to possess over a decree for payment of future alimony. * * * We think the conclusion is inevitable that the Lynde Case cannot be held to have overruled the Barber Case, and therefore, that the two cases must be interpreted in harmony, one with the other.” The New York statute considered by the Supreme Court in the Sistare Case was not as broad in its terms, when read in its entirety, as is the New Jersey act, in that under the New York statute a defendant could not make application to have the decree for alimony varied or modified “unless leave to make the same shall have been previously granted by the court by order * * Moreover, as is pointed out in the Sistare opinion (on page 912 of the L. Ed.):

“It was not unusual in New York to resort to executions as upon judgments at law to enforce collection of unpaid alimony installments” (and at page 913),

“* * * In view of the further fact that decrees for alimony in New York, where authority to modify was not expressly conferred by statute, or was not reserved in the decree at the time of rendition * * *.”

In this state executions to collect arrears of alimony or maintenance issue out of Chancery only, upon the special order oí the Chancellor. R. S. 2:29-58; N. J. S. A. 2:29-58, provides that an abstract of a Chancery decree may become a lien on lands if filed and recorded in the Supreme Court, but it has been held that a decree for alimony payable in future installments is not such a money decree as will provide the basis of the lien. An order fixing the arrearages must be secured, and an abstract of such order filed and recorded. Rooney v. Rooney, 102 N. J. Law 551; 133 Atl. Rep. 752. Executions at law to collect alimony arrearages have never otherwise been permitted in New Jersey. In this respect our practice is essentially at variance with that in New York in the importance respect pointed out by Chief-J ustice White in the Sistare Case, and as above stated the decree in the case at bar contains an express reservation, which in the opinion of the Chief-Justice is also a differentiating circumstance. In harmonizing the rulings in the Barber and Lynde Cases, Chief-Justice White said:

“First, * * * generally speaking where a decree is rendered for alimonjr and is made payable in future installments, the right to such installments becomes absolute and vested upon becoming due, and is therefore protected by the full faith and credit clause, provided no modification of the decree has been made prior to the maturity of the installments, since, as declared in the Barber Case, ‘alimony decreed to a wife in a divorce or separation from bed and board is as much a debt of record, until the decree has been recalled, as any other judgment for money is/ Second, that this general rule, however, does not obtain where, by the law of the state in which a judgment for future alimony is rendered, the right to demand and receive such future alimony is discretionary with the court which rendered the decree, to such an extent that no absolute or vested right attaches to receive the installments ordered by the decree to be paid, even although no apjffieation to annul or modify the decree in respect to alimony had been made prior to the installments becoming due.”

The decision of the United States Supreme Court in the Lynde Case is direct authority to the effect that under our statute as it was in the year 1900 (and it has not since been changed on that point) this court has authority to modify or vacate its alimony and maintenance decrees as to overdue and unpaid installments. The Sistare Case was decided by the United States Supreme Court in the year 1910. Three years later that court again cited the Lynde Case with approval in deciding Thompson v. Thompson, reported in 226 U. S. 559; 57 L. Ed. 347. It is interesting to note that the opinion in the Thompson Case was handed down by Mr. Justice Pitney and that he referred therein to the New Jersey case of Lynde v. Lynde, 64 N. J. Eq. 736, 751; 52 Atl. Rep. 694, the opinion in which he had written for our Court of Errors and Appeals when that, court had a phase of the Lynde litigation before it in the year 1902 and in which he mentions the Supreme Court decision handed down in April, 1901. Mr. Justice Pitney, before his elevation to the United States Supreme Court had been successively a Supreme Court Justice and Chancellor of New Jersey. He was fully conversant with the New Jersey law on the subject and aware of all of the implications of the opinion of Mr. Justice Gray in the Lynde Case. The approval of that decision by him in his opinion in the Thompson Case is therefore of the greater significance.

In accord also with this view is the early decision of our Supreme Court in Van Buskirk v. Mulock, 18 N. J. Law 184, in which Chief-Justice Hornblower said:

“It is not always easy to Say when a decree is final; and when it is so, it is not final in the sense of a judgment at law. It is, at least, in a qualified sense, always open. It may be re-examined on a bill of review; it may be opened for a re-hearing; it may, in some cases, be mitigated, or modified or relieved against, upon petition. * * * On which of such decrees, or on what branches of them, are actions at law to be brought? If we begin, where shall we end? Besides, after final decrees, equities may arise by the change or death of the parties, or.by acts of parties, that may affect the rights, lessen or increase their equitable liabilities, or altogether discharge them. Upon a ca. sa. or ft. fa., or upon a sequestration or attachment, out of Chancery, upon its decree, a party may approach that court which is always open, by petition, or on motion, and have the benefit of some equity that has arisen since the decree. But if an action at law is brought on the decree, how can such relief be given? Suppose a decree for alimony, and afterwards the wife should return to the husband and be reconciled; or should so badly conduct herself, as to entitle the husband, in equity, to be relieved from the decree? Or, a change in his circumstances, from competency or wealth, to embarrassment and poverty, under providential dispensations, that would induce the Chancellor to lessen the amount of alimony? * * *.”

While expressions to the contrary may be found in cases decided in this court, they are mostly by way of dicta, and there is lacking any well-considered decision. The question has not yet been dealt with by the Court of Errors and Appeals. This court is therefore free to adopt the construction given to the statute in the Lynde Case. Not only is that construction more in harmony with the evident legislative purpose, the nature of the subject-matter and the approved methods of administering relief according to equitable principles, but (in the absence of a controlling decision to the contrary) this court ought to regard the decisions of the United States Supreme Court as of high authority. The cases decided in that court, both before and after the Sistare decision, have been in accord with the ruling in the Lynde Case. Audubon v. Shufeldt, 181 U. S. 578; 45 L. Ed. 1009; Wetmore v. Marcoe, 196 U. S. 73; 49 L. Ed. 390; Thompson v. Thompson, supra; Yarborough v. Yarborough, 290 U. S. 226; 78 L. Ed. 269 (1933). See, also, Hanson v. Loomis, 18 Fed. Rep. (2d) 528.

And that ruling has remained unchanged for almost forty years in the federal courts, which fact in itself, as Chief-Justice White observed in the Sistare Case (commenting upon the long period of time which had intervened between the decisions of that court in the Barber and Lynde Cases) “adds authoritative force to the ruling.”

For the above reasons it is determined that complainant has no vested right to recover the arrearages under her order out of the estate of her deceased husband. It is within the sound discretion of this court to allow or to disallow her claim, upon general equitable principles.

In my judgment, under the circumstances of this case, complainant’s application should be denied. The proofs on complainant’s part are to the effect that no alimony was in fact paid by the defendant after February 18th, 1933, although the original order was never modified, but the complainant took no steps whatsoever to enforce the decree against her husband in his lifetime, although he remained at all times within the jurisdiction of this court and although no obstacle stood in the way of her taking proceedings against him at any time for the enforcement of the order. Complainant gives as her reason for not having proceeded upon the order that she was under the impression that her husband’s financial means were inadequate and learned that his health was not good. It appears that the daughter of the parties became self-supporting in or about the year 1930 and reached the age of twenty-one years in the year 1934. It further appears that the defendant, Francis P. Duffy, in his lifetime and after he is alleged to have ceased to make payments under the order expended sums of money aggregating $1,154.49 for repairs to real property owned by complainant. By his last will and testament he favored a brother and a sister-in-law, with whom he had lived after his separation from complainant and who took care of him during his illnesses, bequeathing legacies of $50 each to his widow and daughter and devising to his widow a life estate in certain real property which she claims is now worthless. He died seized of real estate and possessed of some $4,600 in bank deposits.

Under these circumstances complainant, in my judgment, is estopped to press for payment of alleged arrearages under the order. That the court may infer from the circumstances surrounding a given case that the parties have made some arrangement between themselves with respect to support, or that complainant has acquiesced in defendant’s default or has waived her strict rights under an alimony or maintenance decree, where she has failed for a long period of time to resort to the court, has long been settled law. The ecclesiastical courts would not ordinarily enforce arrearages of alimony beyond one year, a rule which has met with approval in our own decisions. DeBlaquiere v. DeBlaquiere, 3 Hagg. Eccl. 322; 162 Eng. Reprint 1173; Lynde v. Lynde, 64 N. J. Eq. 736, 753; 52 Atl. Rep. 694; Warren v. Warren, 92 N. J. Eq. 334, 337; 112 Atl. Rep. 729; Freund v. Freund, 71 N. J. Eq. 524, 529; 63 Atl. Rep. 756; affirmed, 72 N. J. Eq. 943; 73 Atl. Rep. 1117; Reik v. Reik, 101 N. J. Eq. 523; 139 Atl. Rep. 385; affirmed, 103 N. J. Eq. 23; 141 Atl. Rep. 921; Wilson v. Wilson, 14 N. J. Mis. R. 33; 181 Atl. Rep. 257; Herman v. Herman, 17 N. J. Mis. R. 127; 5 Atl. Rep. (2d) 768.

Particularly should an estoppel be applied in this case because of the defendant’s death.

“Where one is aware of his rights and fails to assert them promptly after knowledge of their invasion, and the person against whom the rights could have been asserted might have a valid defense thereto but is dead, and the evidence of such defense may have been lost by great lapse of time and it is thus rendered difficult to decide the justice of the rights so tardily asserted, the long delay not explained satisfactorily, amounts to such laches as will bar the relief sought.” Phair v. Melosh, 125 N. J. Eq. 497, 502; 6 Atl. Rep. (2d) 491; affirmed, 127 N. J. Eq. 15; 11 Atl. Rep. (2d) 32, and eases cited therein.

An order will therefore be advised dismissing the petition to fix arrearages of maintenance, and vacating the order reviving the suit.


author: Delaney, C. P. J.

text:
    Passaic County Court of Common Pleas.
    JOSEPH WEIR, PETITIONER, v. NEW AMSTERDAM CASUALTY COMPANY, DEFENDANT.
    Decided March 24, 1941.
    For the petitioner, Isadore Babinowitz and Schwartz & Schwartz.

    For the defendant, James J. Sheffington.

   Delaney, C. P. J.

On March 22d, 1939, in the Workmen’s Compensation Bureau, the petitioner, Joseph Weir, filed his original petition for compensation, alleging that on the preceding January 28th he sustained both temporary and permanent injuries in an accident arising out of and in the course of his employment. In that petition he named Clinton Hill Painters and Decorators as his employer and the present defendant, New Amsterdam Casualty Company, as his employer’s insurance carrier. On or about April 4th, 1939, the New Amsterdam Casualty Company caused an answer to the petition to be filed; in form, the answer was signed “Clinton Hill Painters & Decorators by William A. Davenport, Agent, and Attorney;” but it was concededly the answer of the insurance company. The answer did not deny the alleged accident, but set up only that the petition was prematurely filed; that the respondent had not denied petitioner’s right to permanent disability, but had requested an informal hearing thereon; that a date for the same, namely, March 31st, had been, in fact, fixed, the petitioner not attending; that the respondent would apply to the court for an examination of the petitioner in order that the percentage of his permanent disability, if any, might be determined, but would resist claims for fees and costs; and, finally, that whatever temporary disability followed the petitioner’s accident had already ceased.

The fact is that before the filing of petitioner’s petition for compensation and after the receipt by the New Amsterdam Casualty Company on February 17th, 1939, upon its own printed form “C,” of a detailed report of petitioner’s injury, it had paid him, “for temporary disability,” the total sum of $100 for five weeks, running from February 4th to March 10th, 1939, at the rate of $20 a week. That report stated the employer to have been “Clinton Hill Painters Decorators” and that the occupation of Weir was that of “carpenter,” and in answer to question 16 of form “C,” reading “Exact location of accident. If away from plant, give town, street and number,” declared “999 Broad St. Newark, N. J.” —a place away from the insured’s shop. With this knowledge of the character of Weir’s employment and of the place and circumstances of his accident, the insurance company made him the aforesaid payments “for temporary disability.”

On June 20th, 1939, the case was formally tried in the Workmen’s Compensation Bureau at Paterson (the petitioner being a resident of Passaic County) — the fact of petitioner’s accident or of its having arisen out of and in the course of his employment not being in issue; witnesses were sworn and heard both for the petitioner and for the respondent, Clinton Hill Painters and Decorators; and on behalf of the latter, the insurance company produced two medical experts on the extent of petitioner’s permanent disability, and paid them for their testimony. The petitioner, among other things, testified that Clinton Hill Painters and Decorators was his employer, and that he believed Harry Pilchman to be the proprietor and Louis Lipschultz the foreman. On the other hand, Pilchman, sworn for the respondent, testified quite casually and incidentally that, at the time of the petitioner’s accident, petitioner was employed by a firm, trading as “Clinton Hill Painters and Decorators,” composed of himself and the said Lipschultz; but this apparently was not the main point or the chief object of his evidence; it seems, as it appears in the record, as if subsidiary to another purpose altogether, namely, the petitioner’s own representation to the witness as to his physical condition on a named date.

During this hearing in the Bureau, no claim was made, nor any intimation given, that if the petitioner should obtain an award — and an award for some sum, under the testimony of the respondent’s own medical experts, seemed inevitable, and must have been foreseen — the New Amsterdam Casualty Company would not be answerable for it. As far as was disclosed or hinted, the insurance company was defending the case in the ordinary circumstances and for the usual purposes. Ho peculiarity about the defense can be discerned -or inferred.

The determination of facts and rule for judgment dated June 2/th, 1939, ran, in fact, in favor of the petitioner; it allowed him compensation for temporary disability beyond that for which the New Amsterdam Casualty Company had previously paid, as above noted, and compensation for permanent disability based on the percentage of permanent disability found to exist; it directed respondent to pay also certain fees for medical treatment and bills for hospital services and for expert medical testimony and for counsel fees. But the caption of the' cause was altered in the determination of facts and rule for judgment; the respondent was no longer called, as in the original petition of March 22d, 1939, merely Clinton Hill Painters and Decorators, but Harry Pilchman and Louis Lipschultz, trading as Clinton Hill Painters & Decorators, improperly pleaded Hill Painters & Decorators.

On August 1st, 1939, the cause was back again in the Workmen’s Compensation Bureau, on the application of the petitioner for leave to amend the title in such manner that the respondent should be described as Harry Pilchman, trading as Clinton Hill Painters & Decorators. At the outstart of this second hearing before the Bureau, counsel for the petitioner stated in the presence of the attorney of the respondent that the altered title of the matter, as the same appears in the determination of facts and rnle for judgment, had been adopted “by virtue, and as a result, of the suggestion by the attorney for the respondent,” and plainly intimated that such suggestion had been made for no honorable end. In the circumstances the statement cannot be considered by the court; it was neither a stipulation nor an admission' — • the attorney for the respondent having merely remarked: “I have nothing to say. I am just waiting for the proof.” And thereupon proof was offered by both parties on the question as to what person or persons was or were employing petitioner at the time of his accident. The weight of the evidence, as it appears to me, was to the effect that a silent partnership had subsisted between Pilchman and Lipschultz from August, 1938, to April, 1939, and that the petitioner, when injured, was the employe of the firm. In any case, the Bureau dismissed the application of the petitioner to amend.

This present proceeding comes here under the third alternative clause of R. S. 34:15-84. Petitioner seeks an order of this court, enforcing against the New Amsterdam Casualty Company the judgment entered under the said determination of facts and rule for judgment, dated June 22d, 1989.

The insurance company interposes objections; it says that in its Workmen’s Compensation policy numbered S. C. 553750, issued April 21st, 1938, and expiring on the corresponding month and day of the following year, the insured employer is declared to be “Harry Pilchman, doing business as Clinton Hill Painters and Decorators;” that that declaration, while true on the date of the issuance of the policy, became false in August, 1938, in which month its insured, without notice to it or subsequent ratification by it, entered into a co-partnership with Louis Lipschultz; that in October, 1938, not its insured, but the partnership employed the petitioner and continued to employ Mm up to and at the time of his said accident on January 28th, 1939; that it, the insurance company, got on June 20th, 1939, its earliest knowledge of the existence of the partnership and of the employment of the petitioner by the firm; that it first received this information in Newark from Harry Pilchman himself about an hour before the hearing of the cause in the Workmen’s Compensation Bureau in Paterson, and thereupon offered to defend the case only under a signed non-waiver agreement; that Pilchman refused to subscribe the. agreement, and that the insurance company then said that it would defend the petitioner’s claim as if Pilchman had acceded to the request of the insurance company, and signed the non-waiver. To this latter matter reference will presently be made.

The insurance company offers further defenses; it raises a question of the jurisdiction of this court, and says that this proceeding, if brought at all, should be in'the Essex Common Pleas, the petitioner’s accident having occurred in that county. And finally it says that its policy describes the business of its insured as painting and decorating and incidental shop work, and that the petitioner, when injured, was readjusting rollers in a sliding door — work, it contends, of a carpenter and outside the scope of the business of the insured as declared in the carrier’s policy.

The last above mentioned point ignores the provisions of R. S. 34:15-87; N. J. S. A. 34:15-87.

The question of jurisdiction of the Passaic Common Pleas is a basic-matter, and will be next noticed.

R. S. 34:15-83, 84, 85 and 86; N. J. S. A. 34:15-83, 84, 85 and 86, all concern the present proceeding. It is not claimed by réspondent that any language in any of these four sections directs that this application should have been made in the Essex Common Pleas, the accident having occurred in the County of Essex; but the contention is that because R. S. 34:15-66; N. J. S. A. 34:15-66, which deals solely with appeals from the Bureau, provides that appeals should be to the Common Pleas Court of the county in which the accident occurred, such matters as this, in no sense an appeal, should go to the same county.

We find nothing of merit in this contention.

The venue lor the trial oí original petitions for compensation is fixed by R. S. 34:15-53; N. J. S. A. 34:15-53, and says:

“The petition shall be heard either in the county in which the injury occurred or in which the petitioner or defendant resides, or in which the defendant’s place of business is located, or in which the defendant may be served with process.”

If the legislature had intended that proceedings of the present- kind, designed solely to compel'the insurance carrier to pay the judgment, should be enforceable only in the county in which the accident happened, it is curious that it did not say so. There are indications that it did not mean so. In R. S. 34:15-85; N. J. S. A. 34:15-85 it is declared “that jurisdiction of the employer shall, for the purpose of this article, be jurisdiction of the insurance carrier, and that the insurance carrier shall in all things be bound by and subject to the orders, findings, decisions or awards rendered against the employer for the payment oí compensation.”

The procedure, in general, followed in this case, follows the established precedence. A petition and a rule to show cause appear proper. Harvender v. United States Fidelity and Guaranty Co., 8 N. J. Mis. R. 634; 151 Atl. Rep. 446; Stefanek v. Ocean Accident and Guaranty Corp., 186 Atl. Rep. 778; American Mutual Liability Insurance Company of Boston v. Chodosh, 123 N. J. L. 81; 8 Atl. Rep. (2d) 64.

We think the appropriate procedure has been followed in the proper county.

Whether the New Amsterdam Casualty Company became, upon the formation of the partnership, entirely exempt for the moment from its obligation to Pilchman under its policy need not be decided. There is authority to the effect that, notwithstanding his partnership into which he entered after the issuance of the defendant’s policy to him, his carrier remained liable to him. In George Reid et al. v. Industrial Accident Commission et al., 114 A. L. R. 720, the California court said:

“A workmen’s compensation insurer is liable on a policy issued to an individual employer who afterward formed a partnership with another for the amount of an award of workmen’s compensation to an injured employe of the partnership, since a partnership not being an entity, an employe of a partnership is an employe of each individual partner.”

The fact is that the New Amsterdam Casualty Company defended this action, and defended it in such circumstances, we think, as precludes it from raising any defense to this proceeding.

On this point, evidence was offered by both parties before me on October 10th, 1940. As to what occurred in Newark on the morning of the hearing before the Bureau in Paterson, Harry Pilchman testified:

“First told me they thought they were not responsible for the claim because of the partnership and gave me a form to sign and said they would appear for me but not to hold them responsible. I wouldn’t have to pay them for appearing. I told them I had paid for the policy and they had to take care of it for me and I refused to sign the form.”

The form, as described by him was in substance that he was not to hold his insurance carrier responsible in case it lost the case. And then he said that he was “going to walk out and Mr. Davenport told me to wait and took me to court here in Paterson,” in his car.

He added that he had since been discharged from bankruptcy, and had listed Weir’s claim for compensation as one of his debts.

It should be noticed here that there has never been any accusation against Pilchman by the New Amsterdam Casualty Company, either in the Bureau or before me, of fraudulent concealment or of intentional mis-statement; he has not been charged with bad faith in any phase or at any step. He testified, and n'o one disputes it, that until an hour before the trial in the Bureau, no one inquired of him whether Clinton Hill Painters and Decorators, at -the time of Weir’s injury, was the trade name of an individual or of a partnership. He asserted, and there is no testimony in the record to the contrary, that he felt that his insurance carrier, in contending that it was not bound in the circumstances by its policy, was “absolutely wrong and they had to pay that policy.”

William II. Kuhl, an employe of the insurance company, testified that he talked with Mr. Pilchman in Newark on the day of the hearing, and that Pilchman spoke of Weir as a carpenter, and that as a result of further inquiry, Pilchman said that he had formed a partnership with Lipschultz after the issuance of the policy, and that Lipschultz was to do the carpenter work of the firm and Pilchman the painting and decorating. Kuhl further testified that he told Pilchman that the policy ran to him individually, but that Weir, having been employed by the partnership, was not covered by the policy, and asked him to sign a non-waiver agreement, and that Pilchman refused.

On July 10th, 1939, the New Amsterdam Casualty Company wrote a letter to counsel for the petitioner, acknowledging a recent receipt of the determination of facts and rule for judgment hereinbefore referred to, and added that it had not insured the respondents named therein, but that its policy covered Harry Pilchman individually, and refused to pay the award. Under the same date it sent a significant letter to the said Harry Pilchman, in which it declared — “you recall that we offered to defend the case under a signed non-waiver agreement but you refused to sign it, and you were then advised that we would defend you under'the same conditions as contained in the non-waiver agreement.” In so far as this vital matter goes,, the letter ended there. It failed to assert that Pilchman assented to his carrier’s guarded proposal; he himself says that he did not: and I am satisfied that if he had assented or if the insurance company had understood him as assenting, the letter to him of July 10th, 1939, would not have failed to have averred his assent.

Without Pilehman’s assent, his carrier, having defended the suit in the Bureau with full knowledge of the facts, cannot now disclaim liability for the award. This is the settled law of this state. Caiola v. Aetna Life Insurance Co., 13 N. J. Mis. R. 845; 181 Atl. Rep. 524; affirmed, 116 N. J. L. 381; 184 Atl. Rep. 736; Serafino v. United States Fidelity and Guaranty Co., 122 N. J. L. 294; 4 Atl. Rep. (2d) 850.

The claim by the carrier that it was bound to defend, whatever the circumstances, and whatever its knowledge of them, under the following clause of its policy is without sense. The clause referred to runs:

“Three — To defend in the name and on behalf of this employer, any suits or proceedings which may at any time be instituted against him on account of said injuries, including suits or other proceedings alleging such injuries and demanding damages or compensation .therefor, although such suits, other proceedings, allegations or demands are wholly groundless, false or fraudulent.”

If, at the time of the accident, there is no coverage, the carrier’s duty toward its insured has terminated altogether. American Mutual Liability Insurance Company of Boston v. Chodosh et al., supra.

The New Amsterdam Casualty Company is bound by the award, and an order will be made requiring it to pay the judgment entered thereon.