author: Stein, Y. C.

text:
    Leo M. Waldor, complainant, v. Joseph F. Bruey, individually and trading as Federal Tool and Machine Co., defendant.
    [Decided September 10th, 1946.]

      Messrs. Buback & Albach (Mr. Meyer IS. Buback, appearing), for tbe complainant.

      Mr. Meyer JS. Buback, for the receiver.

      Messrs. Kalisch & Kalisch (Mr. Isidor Kalis'di. appearing), for the defendant.
   Stein, Y. C.

The final decree in this cause was advised by me on April 18th, 1946, after I had considered the special master’s report filed with me the preceding November, had read and analyzed the proofs and exhibits, which amount approximately to 2,000 pages, and had by order overruled the exceptions filed by both sides and had confirmed the master’s report. By my letter of April 8th, 1946, I informed counsel for the parties that not alone were the findings of the special master abundantly supported by the proofs but that upon an independent analysis of those proofs I reached the same result as the master. I thereupon confirmed the master’s report in its entirety and the final decree followed shortly thereafter. Pursuant to my request, expressed in that letter, counsel have informed me that the defendant, Bruey, has appealed from the order overruling his exceptions to the master’s report and from the said final decree. Appellant’s counsel has transmitted to me the printed state of the case on appeal so that any references I might wish to make to the testimony could be made by page number in the printed record, thus avoiding page references to the typewritten transcript, which would result in confusion.

There is another appeal pending between the parties concerning which this court has already spoken. 138 N. J. Eq. 76; 46 Atl. Rep. (2d) 802. It relates to the defendant’s appeal from my order allowing the special master compensation for his labors in the cause. On that subject my order appears at page 279 and my memorandum on that subject appears at page 270.

The bill was by one partner against the other and it sought, amongst other things, that the defendant, Bruey, be compelled to account for partnership funds misappropriated by the latter, that he be restrained from commingling partnership funds with his own and from denying complainant access to the books, accounts and records of the partnership, that the defendant make discovery of partnership transactions carried on by the defendant in his own name, and that a receiver be appointed to conserve the partnership funds, assets and business, with power to continue the operation of that business and with further power to take action to compel the defendant to respond to the partnership fund for moneys dne it from the defendant.

It appeared to me from a reading of the bill and the supporting proofs that at the time this suit was commenced the co-partnership in which complainant and defendant were equal partners was in a very precarious situation, that the business and property of the firm were within the complete domination of the defendant to the exclusion of his partner, and that the partnership funds were in the process of being looted by the defendant. Accordingly, on September 5th, 1944, I appointed a custodial receiver and imposed upon the defendant certain imperative restraints, one being to the effect that he should not withdraw or attempt to withdraw any of. the funds of the co-partnership on deposit to its credit in any bank or banks (page 53). Until then only the defendant could sign firm checks. My order further provided that such funds on deposit to the credit of the firm be withdrawn in the co-partnership name by cheeks to be signed only by the custodial receiver. ' The receiver qualified the same day. The defendant admitted on cross-examination that late in the afternoon of September 5th, 1944 (the day the receiver was appointed), he received at his home at Brielle a telephone call from his office informing him that the receiver was at the plant taking possession. The plant was in Newark. The next morning, at 9 o’clock, the defendant, Bruey, went to the banking house of the United States Trust Company, where the firm had its funds on deposit, and cashed the firm’s check for $8,000. That was about all the money that the firm had. Bruey admitted that this was the first time that he had ever gone to the bank as early as 9 o’clock to cash a check (pages 1497, 1498). The defendant returned the money later that day under the following circumstances:

The receiver appeared before me at eleven o’clock that morning and reported that while he had been sitting in the bank’s front office, presenting his credentials and having the partnership funds transferred to his name as custodial receiver, the defendant, Bruey, had walked in at nine o’clock, through a side entrance, and had obtained from a paying teller about all the cash that the firm had, namely $8,000, that in the meantime the officer in the front of the bank, not knowing of that withdrawal, had issued to the reeeiver a hank book with a credit for all the funds not yet known to have been so withdrawn, and that the bank had discovered the situation an hour later. I directed the receiver to make immediate demand for the return of the money and that if it were not returned by three o’clock that day, he, the receiver, should, in conjunction with the bank’s officers, present, the matter immediately to the Prosecutor and also present the matter to me by petition so as to inaugurate proceedings in criminal contempt. Such demand was made, and upon the advice of his counsel the defendant before three o’clock that day returned the withdrawn funds. This occurrence very clearly showed me that the partnership estate required protective measures and that the custodial reeeiver had been, appointed none too soon.

The order of appointment contained the customary show cause feature. Upon return of that order, complainant’s: counsel appeared and informed the court that the defendant was represented by Mr. Andrew B. Crummy and that the latter had said that there would be no opposition to the continuance of the receiver already appointed. Later that day-complainant’s counsel appeared before me with Mr. Crummy and, without objection, took the order continuing the receiver- and converting it from a custodial receivership into that of' an equity receivership over the business, assets and property of the co-partnership. Upon the receiver’s petition I thereafter appointed Meyer B. Euback, complainant’s solicitor, as-counsel to the reeeiver.

Thereafter, when the cause was at issue and referred to me, Mr. Euback and the defendant’s then counsel, Mr. Crummy,, appeared before me and informed me that most of the subjects in dispute between the parties were matters of involved, accounting, that the hearings would consume many weeks,, if not months, and that the matter should be referred to a special master skilled in accounting intricacies, with a power-in the master not alone to report but also to find the disputed facts. Accordingly, I made the reference to Mr. John J. Clancy. To the order of reference the defendant’s solicitor appended his consent (pages 106-108). Counsel’s prediction of the time required for the hearings was not extravagant. witness the record in this ease. The master’s report helped me greatly. It assembled in orderly array all the factual issues and showed skill in matters of accounting and painstaking attention to details. The testimony and exhibits convinced me, as they did the master, and quite apart from his report I reached the same results. However, that report furnishes the advantage that in treating with the items in dispute I shall be able to do so with broader sweep than if it were not a part of the record.

The master’s report deals with thirteen main subjects, twelve of which are identified and summarized in schedule “A” attached to the report (page 259). The thirteenth subject, namely,-that of the respective share’s and participating interésts of the parties in the co-partnership, is presented by section I of the report (pages 194-203). I do not consider it necessary to discuss in detail in this opinion any of the subjects disposed of by the master’s report other than the one dealing with the shares and participating rights of the partners, the one dealing with the dispute over the price charged by Bruey for secondary work, and the one involving the credit allowed Bruey for the use of a machine owned by him and loaned to the partnership.

The Shares of the Partners.

The defendant, Bruey, has for many years been in the business of making tools for machines! That business he has conducted under the trade name of “Federal Tool and Machine Co.” and he is the sole owner of that enterprise. Complainant never had any interest or share therein. In August of 1943 Bruey and the complainant, Waldor, formed the co-partnership involved in this litigation. The stated purpose was to manufacture screw machine' products. On August 4th, 1942, the two men signed and swore to a certificate, filed in the Essex County clerk’s office, stating that they would engage in business as partners under the name of “Federal Screw Machine Products Co.” (page 27). As is usual in certificates of that character, there is no reference to the partnership shares. At about the time this certificate was filed a three year lease was obtained by the firm for a plant on Mitchell Place, in the City of Newark. That lease was signed by both Bruey and Waldor, both of whom personally obligated themselves for the payment of the rent and the performance of the other requirements of the letting. Possession of that plant was taken at once by the partners and the firm conducted its operations there at all times, down to V-J Day, when it virtually discontinued all further business activity. Actual possession of the plant was surrendered by the receiver to the landlord about four or five months ago.

At about the time that the firm was organized the partners sought to bring into the firm three additional men: Messrs. Bertelo, Parrillo and Osmun. These men entered the firm in September of 1943, when articles of co-partnership were prepared and signed by the five partners. That agreement contains the following provision:

“3. The partners shall be entitled to the capital and property and income of the partnership, the good will of the business, in the following shares and percentage as follows:
Joseph F. Bruey ................... 33%%
Leo M. Waldor .................... 33%%
Richard V. Osmun ................. 12%%
Frank Bertelo ..................... 10%
Prank Parrillo ..................... 10%”

It is clear from the foregoing facts that what had been an equal partnership between Bruey and Waldor before the firm was enlarged remained as between the two an equal partnership after the firm expanded. Initially complainant and defendant each had a half interest. In order to admit the three new men, complainant and defendant each reduced his respective holding by 1614%, to make up the 32%% allocated in the aggregate to Osmun, Bertelo and Parrillo. That left 67%% to be divided between Bruey and Waldor. It was equally divided, each keeping for himself 33%%, as indicated in the foregoing schedule of new holdings. (Page 18.)

The new five-man firm lasted but a few months. Dissension developed and Osmun, Bertelo and Parrillo sought relief in Chancery. The court appointed a receiver, who served a few months and until the dispute between the partners was settled amongst themselves. The hill was thereupon dismissed and the receiver discharged. The settlement which terminated that litigation was put into a formal agreement dated January 25th, 1944, by which Bruey and Waldor together bought out the shares and interests of Osmun, Bertelo and Parrillo. By that agreement (page 29) Osmun, Bertelo and Parrillo (there called the “withdrawing partners”) expressly released Bruey and Waldor (there called the “continuing partners”) from all claims and accountings. The withdrawing partners assigned and released unto the continuing partners the former’s percentage, share and interest in the business of the partnership and in its property, assets, credits, effects and good-will. The assignment to Bruey and Waldor was to them and “their heirs and assigns absolutely.” Por this acquisition of the interests of the three withdrawing partners the two continuing partners jointly paid the sum of $12,000 by executing a series of twelve promissory notes signed by Waldor and Bruey jointly. These notes are tabulated at page 32 of the record. Bach month one of the notes was paid with the partnership funds and it is admitted by the defendant that the entire $12,000, represented by those notes, was paid out of the partnership treasury. Again it should be noted that the payment of those notes was collaterally secured by a chattel mortgage given by the partnership to the retiring partners and encumbering a machine owned by the pamership. It might also be noted that by the same agreement of settlement Bruey and Waldor personally assumed the payment of all the debts of the co-partnership. There were no other written agreements between the parties. In the documents already referred to there is not the slightest hint of any contemplated inequality of interest or participation as between the complainant, Waldor, and the defendant, Bruey. By those documents it is demonstrated that these two men have at all times been, in relation to each other, equal partners. Before Osmun, Bertelo and Parrillo were admitted to the firm Waldor and Bruey were for a month or so equal partners, each having a one-half share. The admission of the three new partners created new percentages but still left complainant and defendant each possessed of like participation, viz., 33%%. The expansion of the firm affected Waldor and Bruey in precisely the same measure of contraction or diminution. Thereafter the contraction of the firm (in respect of the number of partners) affected Waldor and Bruey in precisely the same measure oí expansion of interest. The interest of each was restored to that of 50%. Complainant testified that after he and the defendant bought out the shares of the retiring partners there was no written or oral agreement between them fixing and establishing any new ratio of holding between the two men (page 323). This is confirmed by the answer of the defendant (page 59) in which, speaking of the five-man partnership, the defendant says: “The only interest that the complainant had in any partnership was 33% interest in the original partnership and there was no change in these arrangements after the dissolution of the partnership mentioned in the bill of complaint.” To the same effect is the defendant’s statement in his affidavit, attached to his answer. By what right the defendant, Bruey, attempts to usurp unto himself all the shares purchased by him and Waldor jointly and with their joint funds and joint liabilities, the master could not perceive. Nor can I. The 32%% interest acquired from the three withdrawing partners accrued equally to the two remaining partners, who equally paid for the acquisition. Bruey can no more claim the whole of it than could Waldor, and yet Bruey makes that claim by his answer. But there is more to it than what has already been said. Twice thereafter Bruey altered his story. He claimed that the night before the settlement agreement (Exhibit G, p. 29) was made, by which the interests of the retiring partners were acquired, he and Waldor came to an oral agreement that Bruey was to have 75% and Waldor the remaining 25%. In other words, the essence of his claim was that Waldor’s existing interest of 33%% was to be reduced to 25% while Bruey’s existing 33%% was to be increased by two accretions, viz.: (a) Waldor’s surrender of 8%% and (b) the interests of the three retiring partners amounting to 32%%, thus adding to Bruey’s already existing interest a total of 41%% and bringing his holding up to 75%. This claim was not alone denied by the complainant but is negated by the defendant’s answer, in which it is stated that “the only interest that the complainant had in any partnership is 33%% in the original partnership and there was no change in these arrangements after the dissolution of the partnership mentioned in the bill of complaint. After the dissolution of the partnership mentioned in the bill of complaint, the complainant still had 33%% interest in said partnership” (page 59). The defendant said the «ame thing in his affidavit (page 68). Obviously, if “there was no change in these arrangements” which originally gave complainant 33%%, then the alleged 75%-25% arrangement never took place. The master didn’t believe Bruey on this point. Nor do I.

To support the alleged 25%-75% oral arrangement, the defendant called as his witness a Miss Majewski, whom the defendant visited at her home in Passaic and who later and at the time of the hearing was living in the defendant’s home at Brielle as his housekeeper. She testified that sometime in January or February of 1944 and before the three other partners withdrew both Bruey and Waldor were at her home in Passaic and were discussing their shares in the partnership while having dinner with her, and that Bruey asked Waldor, “What about your share in the partnership?” and Waldor answered, “Why, it is the same as it was before” (page 1105). This statement the witness expanded so as to attribute to the complainant the assertion that their shares were to be “the same as it was before, one-third, and two-thirds for you.” She testified that Bruey objected to that proposal and countered by saying that he, Bruey, was to have three-fourths and Waldor one-fourth and that thereupon Waldor without any further ado reached over the table, shook hands with Bruey, and said, “O. K.” The witness testified that that was the only occasion when any business was ever discussed in her presence by the partners and that she recalled it to Mr. Bruey for the first time in the office of Mr. Bruey’s lawyer about three or four weeks before the day she gave her testimony, and that previous to that day she had not discussed it with Mr. Bruey. The master refused to accept her story. Nor can I believe it. Por over two years she had no occasion to recall the alleged incident or to mention it to Mr. Bruey but she does recall it to his mind at his lawyer’s office while the hearings are in progress. No explanation is furnished for having brought her to the office of Bruey’s attorney in advance of her having recalled and revealed the alleged conversation and • she testified on no other material point. I cannot attribute to Mr, Bruey or his counsel any occult powers of divination. To me it appears that her story was a studied one, but not well studied, for in her statement of what she heard complainant say was the assertion of a nonexistent fact, one that Bruey himself promptly repudiated. She says complainant wanted the shares to be “the same as it was before, one-third and two-thirds.” The fact is that no such ratio had ever theretofore existed between these two partners and on his cross-examination the defendant denied Miss Majewski’s story that Waldor had wanted that their respective interests be one-third and two-thirds “as before” (page 1469). When pressed to explain the conflict between this earlier arrangement of a 25%-75% ratio and the later statements in his answer and affidavit that the complainant had a 33%% interest, his answer was that the one was oral and the other written. The defendant seems to have occupied a position which he wished at all times to maintain in a fluid state, claiming at one time a 66%% interest, at another time an even 2/3 interest, and finally a 75% interest. At another time he claimed that before the five-man partnership agreement was drawn he and Waldor had agreed that Bruey was to have 51% and Waldor was to have only 16%%, and that he, Bruey, had instructed his attorney so to provide in the partnership agreement. Yet the agreement which Bruey subsequently signed gave him and Waldor the like interest in the five-man partnership, viz., 33%% to each. True, Bruey subsequently had his attorney prepare a power of attorney by which Bruey would have had the power to act for 17%% of Waldor’s share, thus lifting Bruey’s power (not ownership) to 51%. Waldor refused to sign this proffered power of attorney, but the fact that it was submitted for his signature is significant. If Bruey at any time had more than a 50% interest in the partnership, what need was there for him to seek a power of attorney which would lift his power to 51% ? Definitely, Bruey did not consider himself entitled at any time during the five-man partnership to any interest greater than 33%%, or thereafter to any interest greater than 50%. That Bruey informed other persons that he and Waldor were equal partners is confirmed by the testimony of the witness Collito and by Mr. Fairchild, the representative of the Packard Motor Car Company, both wholly without interest in the controversy.

I regard the defendant’s claim of any interest greater than 50% as sham and as an attempted fraud upon his partner. The claim is wholly without support in the signed documents, in the proffered power of attorney, and in the attendant circumstances. Quite the contrary. All of these, including the testimony of disinterested witnesses of unimpeachable credibility, riveted the fact that the interests of these two men were always equal. The defendant’s attempt to overreach on the matter of his share in the business is quite in line with his actual overreaching in the matter of the prices that he personally charged the firm for secondary work done by him for the firm. With that complaint I now deal.

Overcharge Bx Defendant for Secondarx Work.

Paragraph 18 of the contract between the five partners provided that all secondary operations or tool work or machine shop work which would not be performed by the co-partnership' should be sub-contracted exclusively to the Federal Tool and Machine Co. That is the trade name under which the defendant was conducting his own private tool business in a plant on Orchard Street, in the City of Newark. The contract recited that this provision in favor of the Federal Tool Company should run with the co-partnership. Assuming that the stated provision survived the dissolution of the five-man partnership and was carried over to the continuing partners in their new relationship, this can mean only, as claimed by the defendant, that Bruey was given a pre-emptive right to do such secondary work as the firm could not or would not itself perform. That claim was not disputed either by the complainant or the equity receiver in this cause. It will be noted, however, that nothing in that agreement or in any other document between the parties fixed the price at which the defendant was to charge the firm for such secondary work. In the absence of any express stipulation fixing such price, it would naturally follow that the charge would have to be a reasonable one and one consistent with prices charged by others for the like work per* formed in the same general area. The bill of complaint charges that considerable secondary work was done by the defendant under an express mutual agreement that such work was to be charged at the “fair market value” thereof. The defendant’s answer (page 61) denies any express agreement concerning price but says that “it was agreed that ‘Tool’ was to make a reasonable charge for the work done by ‘Tool.’” The word “Tool” stands for Federal Tool & Machine Co., the trade name or style under which the defendant personally conducted his own separate business. The defendant’s answer also states that the defendant did not receive any large or “unreasonable” compensation for the secondary work done for the firm. The defendant’s affidavit, attached to the answer, reiterates the agreement that the charges were to be “reasonable,” and that the defendant had not reeeived “unreasonable” compensation for the work done for the firm. Were this all that had to be considered on the subject of the price to be charged by the defendant, the effort would be limited to determining the reasonable and fair market value of the defendant’s performance. Complainant, however, proved an express agreement by which the defendant undertook to do the work at 7%c per fuse housing. As will be presently shown, this unit price was higher than the unit price at which the like work was obtainable at the same time and in the same area from other competent concerns engaged in doing such work. The defendant denied making the agreement to do the work at 7%c per unit and claimed that he was entitled reasonably to loy^c per unit. The master having found from the evidence that the same work could be had in the open market for as little as 5c per unit, was constrained to allow the defendant to charge 7%c per unit, and this because of the complainant’s own testimony that the stipulated price was 7%c. Bearing in mind that it was the complainant himself who proved a market price of 5e per unit, his claim of an express agreement at 7%c per unit is entirely credible. Because of this circumstance and other circumstances brought out by the evidence, the master rejected the defendant’s denial of a stipulated price of 7%c, and I concur in that action. Were it not for the fact of the agreed price—a fact voluntarily and candidly brought out by the complainant himself—the reasonable charge allowable to the defendant would have been under and probably at the figure of 5c per unit. These variances translate themselves into very substantial sums of money when applied to the huge quantities of fuse housings upon which secondary work was performed, initially for the firm and thereafter for the equity receiver in this cause. It should be remembered that the primary work on the fuse housings was performed by the firm and that on a very considerable number of fuse housings the secondary work was performed by the defendant in his own private business. Until February of 1944 the secondary work being done by Bruey was made up of six separate operations. The major two of these operations consisted of (1) boring a hollow mill and (2) boring a large counter-bore. These two operations alone constituted about 50% of the required secondary work undertaken by the defendant. Under the first contract which the firm obtained, it received for its primary work 12c per unit. Under a subsequent contract the price for both primary and secondary work was fixed at 24c per unit to be paid by the customer, of which the firm received 12c for the primary work and the defendant received 12c for his secondary work, the latter still consisting of six operations. On a later contract with the Unexcelled Manufacturing Company the price for the entire job was fixed at 23c per unit, and by agreement between the complainant and the defendant the firm was to receive 12c for the primary work and the defendant was to receive 11c for his secondary work, still consisting of the six operations.

The defendant was not able to perform the aforementioned two major operations in an efficient manner and there was a tremendous number of rejections. The fuse housings were used for military purposes and required precision performance. By February, 1944, it became evident that the defendant was unable to do a job acceptable to the customers who, in turn, were subject to strict military check-up on the quality of the work. Therefore, by the agreement of the parties, the division of work between the firm and the defendant was substantially altered. The firm took over the two major operations, which had constituted about 50% of tile defendant’s secondary work, leaving four minor operations to be performed by the defendant. This change, of course, imposed on the firm increased costs of labor, overhead and other expense of production. Upon the change going into effect, the firm naturally became entitled to a higher price for its primary work, thusly enlarged by the two major secondary operations, and by the same token the defendant’s price required corresponding reduction or abatement. Nonetheless, over the continued protests of Waldor, the defendant persisted in charging for the four remaining secondary operations the same price which he had theretofore charged for all six operations. If 12c was a fair price for the six operations, then the elimination of the two major operations constituting 50% of the entire secondary job should have resulted in the defendant’s being entitled to receive 6c per unit. The defendant denies the proof of complainant and his expert witnesses that the two transferred operations constituted 50% of the secondary work, and he insists that they constituted but one-third of the secondary work. Even if this were so, Bruey’s charge could not reasonably be more than two-thirds of the original charge of 12c, namely, 8c per unit. Bruey, however, arbitrarily fixed upon lOj^c as the charge for the remaining four operations and he has stuck to that claim throughout this litigation despite the great amount of proof from disinterested persons fixing the reasonable price as ranging from 7%c down to 5c per unit.

At this point it is important to note that throughout the life of the firm, from its organization down to the date I appointed the custodial receiver, checks against firm funds in bank were signed by Bruey alone. It is not disputed that the complainant, Waldor, never signed a single check against firm deposits. The power to draw funds was reposed exclusively in Bruey. All the bookkeeping details were handled from Bruey’s own office, where the books and records were kept, and with few exceptions all collections on the firm’s contracts cleared through Bruey’s office and through his own bank account. He would receive collections and make disbursements through his own account, but would also retain for himself, for his secondary work, consisting of four operations, moneys at the rate of lO^c per unit. This led in the béginning to considerable strife between the partners! Complainant insisted that Bruey charge only 7e per unit. Bruey finally said he wanted 8c per unit. They both consulted a Mr. Fairchild, who was the material expert and expediter of the Packard Motor Car Company, for which the firm was performing primary and secondary work on fuse housings. Fairchild made some inquiries and found a concern in North Bergen, New Jersey, which offered to do the secondary work for 5c a unit. Fairchild reported this to the two partners and told them that they ought to compromise their dispute by splitting the difference and establishing 7%c as the fixed price. He even suggested to Bruey that the latter could sub-contract the work to that other concern and could make a turnover profit of 2%c per unit. The two partners thereupon agreed- on 7%c per fuse housing.

When the receiver was appointed herein he was informed of the agreement between the partners that the price to be charged by Bruey was 7%e per unit. He also ascertained that Bruey was retaining firm funds at the rate of lO^c Per unit. He made inquiries in the market and received an offer from the Cooper Engineering Company of Chatham, New Jersey, to do the like work at 7%c per unit. The receiver experimented with some housings, had some sample work done by the Cooper Company, and that work was approved and accepted by the firm’s customers. The Cooper Engineering Company offered to take on any quantity of housings at the unit price of 7%e. These facts were made known by the receiver to the defendant and the receiver expressed his unwillingness to allow lO^e for work that could be obtained in the open market at 7%c. Bruey refused to agree to do the work for the receiver at the lower figure and insisted that under his contract he was entitled to receive all the secondary work and that he, Bruey, alone could fix the price. So he interpreted his contract. In the meantime and pending this dispute, Bruey continued to receive collections from the firm’s customers, and before long he was indebted to the receiver for approximately $33,000, representing the differential in unit charges. Thereupon the receiver exhibited his petition to me, presenting the facts and expressing his wish to award to others the secondary work required by the firm, and seeking the court’s instructions. I allowed an order to show cause returnable December 10th, 1944. I heard the matter on February 20th, 1945, at my chambers in Elizabeth. There were present the receiver, his counsel, and Bruey’s counsel, Mr. Crummy. There was laid before me the contract under which the defendant claimed the right to the secondary work. There was also exhibited to me the offer of the Cooper Engineering Company to do the like work for 7y2c per unit. I was also advised by the receiver that pending contracts called for hundreds of thousands of fuse housings and that more contracts were in the offing. I told defendant’s counsel that the receiver would not he justified in awarding the work to Bruey at the larger figure in the face of the lower offer. It was apparent to me that what Bruey was doing was overcharging the firm in which he only had a half interest and favoring his own private business, in which he had a 100% interest. The injury to the complainant was apparent, and without formal order I then and there instructed the receiver to continue to give the work to Bruey only if he would perform at 7%c per unit. Mr. Crummy stated that his client would accept those conditions. Immediately following that conference a stipulation on the price was submitted to Mr. Bruey and he declined to sign it. Thereupon the receiver promptly awarded all the future secondary work to the Cooper Engineering Company at 7%c per fuse housing. At the hearings Cooper testified that that was a fair and reasonable price in February of 1944 and at all times thereafter and that he made a very good profit at 7%e, notwithstanding the fact that his labor scale in Chatham was higher than that obtaining in the City of Newark. Cooper’s work proved to he most satisfactory. He did for the receiver approximately 300,000 fuse housings, of which less than 1% was rejected by the inspecting authorities.

Besides Cooper several experts testified on the reasonable value of the four operations constituting Bruey’s secondary work. As already stated, Fairchild obtained a bid of 5c per unit, and this from the Paradis Machines of North Bergen. The expert Powell fixed the value of the work at about 6c per unit. The defendant produced one witness, Canning, whose qualifications are not impressive. He stated his opinion that a fair price for the work would have been 8 to 9e per unit.

I think that in allowing Bruey a charge of 7%e per unit he is being dealt with very generously. The complainant acceded to this only because that was the price expressly stipulated. If we pass from that expi’ess agreement into an inquiry of reasonable value, the highest that could possibly be awarded to Bruey would be the 7%e at which the Cooper Engineering Company produced for the receiver this very unit by the thousands with the most satisfactory results. The lowest would be 5c per unit for which the Paradis Company offered to perform. Bruey’s attempt to retain out of the moneys collected by him an excess of 2%c per unit is not alone an act of overreaching against his partner but an act of positive aggression. He had his hands on the firm’s funds, he made the allocations as between himself and his firm, and he simply took and retained what he wanted. For the difference representing the amount of overcharge he was held to account. It was proved that labor costs and other conditions were the same during the period preceding the appointment of the receiver and the period following such appointment. The charge for both periods must therefore be uniform, namely, 7%c per unit. What is a fair charge to the receiver constitutes a fair charge to the firm for the period immediately preceding the receivership. These overcharges translate themselves into the figures furnished by the master in his summary (page 259) under the heading of “Price Adjustment.” They amount to $36,261.33 as between the firm and the defendant and to $39,002.28 (this inclusive of some other items) as between the defendant and the receiver.

One more thing need be said on this subject. It was argued for the defendant that because paragraph 16 of the partnership agreement (page 24) names Bruey the executive manager of the co-partnership and the partners “agree that the said Joseph F. Bruey shall have full and complete authority in all matters of policy and in the conduct of the business of the co-partnership,” he was the final arbiter as to what constituted a reasonable price to be charged by him personally for the secondary work done by him for the partnership. This argument is spurious. The authority so conferred by ■fee agreement does not and cannot capacitate the defendant to accomplish a fraud on his partner. If the “authority in nil matters of policy” conferred by the agreement upon Bruev were unfettered by the rule of reason and fairness, Bruey would have been placed in a position where he could have fixed any price for himself to the deprivation of the firm of all profit resulting from the enterprise. Such result could hardly have been in the contemplation of the parties to the partnership agreement. It seems to me, as the master pointed out in his report, that Bruey’s position was one in which he should have been meticulously and scrupulously careful not to favor his private purse at the expense of the co-partnership. I agree with the master that in relation to his partner, Waldor, the defendant was in a fiduciary position and that it was his duty to hold the scales fairly and honestly balanced between self-interest and fiduciary responsibility. Instead of doing that, he feathered his own nest to the extent of more than $83,000 of firm money. Half of that was money belonging to his partner.

The accounting on secondary work was voluminous and intricate but it proceeded on a uniform allowance to Bruey of 7%e per fuse housing. The application of that priee to the various transactions is given in the testimony and in the accountant’s schedules. They need not be here repeated. The result is mathematically unquestionable and I fully concur in all the reasons stated by the master in reaching the result that he did on this subject.

Bent Due From Firm eor Grtdlet Machine.

Bruey personally purchased a machine and obligated himself to pay therefore $20,670.11. At the time of the hearings he had paid several instalments. He rented that machine to the partnership on or about September 16th, 1944. It was used by the firm until August 18th, 1945, when, immediately after V-J Day, the receiver terminated the rental arrangement and notified Bruey to remove the machine. It was thereafter removed. The period of use by the firm was eleven months and for it Bruey demanded a rental at the rate of 36% a year, based on the cost of the machine. His demand amounted to over $6,800 and he claimed that he was entitled to that because that was the ceiling price fixed by the O.P.A. on rental of machinery. As against this claim the testimony satisfied me that the following occurred: Bruey bought the machine under an arrangement made with his partner that he was to buy it personally; that the firm would then make application to the Smaller War Plants Corporation for a lend-lease arrangement; that if that arrangement could not be obtained either by the firm or by Bruey personally, then Bruey would personally pay for the machine and would furnish its use to the firm on terms identical with those which would have constituted a lend-lease arrangement with the government agency. Those terms were that the firm would pay Bruey a monthly charge of 1%%, to be computed on the purchase price, and that that rental would be for the period commencing with the failure to obtain the lend-lease arrangement with the government. A lend-lease arrangement with the firm was refused by the government on September 16th, 1944, for the reason that the instant receivership was already in effect. Bruey then tried personally to obtain such an arrangement with the government but did not succeed. These facts were before me when an effort was made by Bruey to wrest the machine from the custody of the receiver. Had he succeeded at the time, it would have had a very disastrous effect on the firm’s then pending contracts. I refused to allow the removal of the machine. However, the same facts were re-established before the master and I think he correctly decided that under the arrangement between the partners all that Bruey was entitled to was a rental of 1%% per month for the eleven months that the machine was used. Particularly is this a fair recompense to Bruey when it is considered that under the ordinary lend-lease arrangement with the government the lessee paid a monthly rental of 1 %%, which after five and a half years not only discharged the rental but also satisfied the purchase price of the machine in full and gave a final and absolute title to the lend-lessee. The 1%% per month which the government charged embraced not -alone rental or interest but also amortization of the purchase price. The complainant and the receiver stand on the agreement that the partners made and I see no reason why in good conscience Bruey should be permitted to repudiate his agreement and to enforce a usurious rate of 36% per annum. His demand not only offends the rule of fair dealing between partners but also violates his express contract to charge his firm the stipulated 1%% per month. Here again I refused to allow Bruey to overreach by charging 36% a year in the face of his promise to take 18% a year. The master was right and I concur in his conclusion.

I do not consider it necessary to discuss the many other subjects disposed of by the master’s report and my confirmation of it. On each of those subjects I adopt the master’s reasoning, opinion, finding and report. I wish to add nothing to them. There is, however, one matter unimportant in. amount but significant in its implications. That relates to section XV of the master’s report (page 240) and deals with the subject of the sale of scrap. The matter was first mentioned in the bill and presents the charge that Bruey sold metal scrap, the property of the firm, and retained for himself the $700 realized from that sale. Somewhere near the1 end of 1943, while the first receivership was in effect, Bruey surreptitiously disposed of scrap belonging to the partnership, collected $700 therefor and withheld the fact and the money from the then functioning receiver. The partners quarreled over this conduct, Waldor insisting that the $700 be turned over to the receiver. Bruey refused. But the matter soon came to an end when the receivership litigation was settled and the receiver was discharged. Waldor then asked Bruey either to deposit the $700 to the firm’s bank account or to pay him, Waldor, his half of the money. Bruey said that he had the money in the safe and he kept stalling on the thing with the ultimate result that he never accounted for the money either to the firm or to his co-partner. In his answer (page 63) Bruey admits that he sold the scrap, but says that it was only for the sum of $627 and that the complainant sold scrap for $130, making a total of $757; that the money was put in an envelope and was disbursed for or on behalf of the partnership. The answer asserts that the defendant has in his possession receipts showing the disbursement of the moneys and that many of such -receipts are made-out in the handwriting of the complainant. The defendant said the same thing under oath when he made the affidavit (page 71) attached to his answer. Curiously enough, the defendant failed to substantiate these statements at any time-during the prolonged hearings, and at no time produced a single receipt "made out in the handwriting of the complainant,” or in anybody’s handwriting, which would account for these abstracted funds. I do not believe the explanation furnished in the defendant’s answer and affidavit. It failed of proof and the pilfering of this amount, though small, is just another instance of the defendant’s arbitrarily pocketing firm money just because he considered himself the “boss,” felt that he dominated his partner and believed that he could get away with it. This is but one of the many instances where Bruey used partnership moneys for his own use. One need only examine the many small items conceded on the record by Bruey as proper charges against himself to perceive that he drew very little distinction in his mind between what was his own and what belonged to the firm, of which he was but a member.

In the posture in which -this firm stood when the receiver was appointed, its doom was but a matter of time. It owed large sums to creditors and had only $8,000 in the bank, which was the money Bruey cleaned out the morning after the receiver was appointed. The receiver took hold of the business and from that moment it ran efficiently and prosperously. All the creditors were paid off in full. At the present time the firm is without creditors. Hn less than six months the receiver made a profit of $114,867.09, against which he charged for depreciation of machinery the sum of $13,333.32, leaving a true net profit of $101,533.57. He made considerable profit thereafter until operations stopped on V-J Day. After allowances heretofore made to the receiver and' his counsel by orders from which no appeal was ever taken, the receiver has in hand at the present time over $128,000 in cash. Because of that balance and because there are no creditors, I deemed it unnecessary to compel the defendant to pay to the receiver the amount of $83,373.50, due from the defendant to the firm and its receiver. I considered it expedient to avoid the circuity of payment by the defendant of 100% of his indebtedness and then his taking back from the receiver, on final accounting, one-half of such payment. By my decree (page 294) I made the defendant answerable directly to the complainant for one-half of the indebtedness so due, that half amounting to $41,686.75, and for that amount allowed execution against the' defendant’s property, including his one-half interest in the fund in the.hands of the receiver.


source: Caselaw Access Project

author: Egan, Y. C.

license: Public Domain

text:
    J. M. Lehmann Company, Inc., complainant, v. S. B. Penick Company, Inc., defendant.
    [Decided October 29th, 1946.]

      Messrs. Breslin & Breslin, for the complainant.

      Messrs. Carpenter, Gilmour & Dwyer, for the defendant.
   Egan, Y. C.

The complainant has been engaged in the operation of a manufacturing plant in Lyndhurst, New Jersey, for approximately twenty-seven years. It occupies a tract of land adjacent to land owned by the defendant on which the latter operates an industrial plant for the manufaetuer of botanical drugs. The defendant’s land lies between the westerly boundary line of complainant’s land, and the easterly side of an alleged public street called Chase Avenue. On the westerly side of this alleged avenue defendant owns lands on which there are a number of buildings.

The hill, among other things, alleges that the manufacturing process in which the defendant is engaged, is hazardous and may give rise to explosions and fires; that the defendant has commenced the construction of buildings -which encroach on, obstruct and occupy the avenue aforesaid; that the defendant has erected a wire fence which prevents access to that avenue; that the buildings now under construction by the defendant, and other buildings located on its premises, together with the combustible and explosive chemicals used by it constitute a fire hazard; that the obstruction by the defendant of the avenue aforesaid deprives complainant of a fire break and prevents it from effectually fighting any fire which might take place either in its own building or to prevent the spread of fire from the defendant’s buildings; in consequence, it suffers substantial and irreparable damage beyond that suffered by the public at large, since it is the only property owner in the immediate vicinity of the said avenue other than the defendant. It seeks to enjoin the defendant from building on the avenue aforesaid and from continuing to obstruct it.

The defendant claims to be the owner of the strip of land which complainant refers to as Chase Avenue; and it denies that the avenue has ever been used as a public thoroughfare, or declared to be such by the governing authorities. It asserts that the structures and obstructions were placed on the strip of land, called Chase Avenue, many years ago; that such land has been closed to traffic, or the passage of vehicles before and at the time the complainant acquired title to its premises; that two of the buildings which complainant charges as being obstructions were completed before the end of 1941, and that'the third was completed during the year 1945, before the filing of the complaint; that the complainant observed such buildings being constructed and made no protest thereof to the defendant until after two of the buildings had been completed, and until the third was substantially finished; that all of the buildings in question have been inspected and approved by the municipal building and fire inspectors; that there is no fire hazard incident to the operations conducted by the defendant on its premises, or with respect’ to the structures it has erected thereon; and it charges that the complainant does not own any land abutting on the strip of land referred to as Chase Avenue; suffers no private, direct, material, irreparable, or any other damage beyond that suffered by the public at large by reason of the structures so erected; and that the public does not suffer any damage by reason thereof.

The defendant acquired the lands and premises in question on December 29th, 1937, from the United Cork Company. They are bounded on the north by Hew York Avenue, on the east by the premises of complainant, on the south by the right of way of the Delaware, Lackawanna and Western Kailroad Co., and on the west by Grant Avenue. They embrace about seven acres. The northerly and southerly boundary lines are 541 feet in length, and the easterly and westerly boundary lines are 486.23 and 536 feet in length, respectively.

The United Cork Company developed the property in the year 1913. It erected thereon a number of buildings, storage warehouses and sheds across and within the avenue referred to. The buildings which had been erected at the easterly end of the property nearest to the complainant’s premises were destroyed by fire in 1934. Their foundations which extend across and within the avenue still remain.

Chase Avenue appears on a map of property of Pauline Furman filed in April, 1909. The map shows the avenue as running southerly from Hew York Avenue to the line of the right of way of the D., L. and W. K. K. Co. The easterly line of this street lies 72 feet 4 inches from the easterly line of the defendant’s premises. While the filing of the map would indicate a dedication of the avenue, still the township never accepted it. It does not appear that the avenue has ever been devoted to public use, or to have been used by the public.

From the time that the United Cork Company acquired title to the premises now held by the defendant as aforesaid, it was enclosed on all four sides by a board fence. This fence was replaced by a wire fence three or four years after the defendant took possession thereof. There was no opening in either of these fences from Hew York Avenue into Chase Avenue on the northerly end, nor at its southerly end at the right of way of the railroad. At the latter point it was crossed by concrete foundations and buildings of the Cork Company from 1913 to 1937, when the defendant became the owner of the premises. In addition to the Cork Company’s buildings, the defendant erected others among which are structures, Hos. 10, 11a, and 11. The permit for the construction of the buildings Eos. 10 and 11a contained no reservations of construction on the alleged avenue in favor of the township. However, in the permit for the construction of the building No. 11, a reservation was made.

The defendant is engaged in the milling of leaves, herbs and roots, and to the ultimate processes for obtaining pharmaceutical extracts and insecticides. These extracts are achieved through processing with water and solvents, including alcohol, pentane, benzol and ether. The testimony shows that pentane is a petroleum distillate, whose properties are almost identical with gasoline. It is stored by the defendant in underground tanks and operated through a closed system. Approximately 8,000 gallons of pentane, 500 gallons of benzol and 300 gallons of ether are on the premises from day to day for extract purposes.

The defendant’s operations conform with approved practice and methods, and are subject to municipal authority and approval. They are performed in brick buildings which appear to be fully sprinkled. Precautions against fire include adequate hydrants, fire hose, fire extinguishers, a modern fire fighting truck, and a volunteer fire department, which undergoes drills at least once a month.

The defendant’s storage building No. 11 is about 50 feet from the nearest building of the complainant. The milling and extract buildings are at the westerly end of defendant’s property, approximately a few hundred feet from complainant’s plant.

There is no evidence of escaping pentane fumes. Lucas, the defendant’s superintendent, testified that the pentane loss is one and one-half per cent, in winter and two per cent, in summer. However, complainant’s expert, testified to a loss of five to six per cent, in a comparable plant as normal. In the seven years of operation of the plant by the defendant, there have been no fires or explosions. In the circumstances, I find the hazard is negligible.

The deed under which the defendant acquired title contains a recital that the conveyance is subject to “easement, if any, of Chase Avenue as a public street.” The recital does not establish Chase Avenue as a public street. The record shows that the township on May 14th, 1906, adopted an ordinance establishing the grade of Chase Avenue from Valley Brook Avenue to the D., L. & W. I?. R. Co. right of way. It is conceded that this portion of Chase Avenue was accepted as a public right of way. The portion of Chase Avenue which appears not to have been accepted or devoted to public irse lies to the north of the right of way of the D., L. & W. R. R. Co. and south of New York Avenue, within the defendant’s enclosure.

To sustain its contention that Chase Avenue is a public street complainant offers two maps, one hereinbefore referred to, filed April, 1909, and another filed on November 21st, 1848, which is known as Map of “Kingsland Manor North Section,” on which maps Chase Avenue is laid out. The filing of these maps amounts to a dedication of the avenue only. Until there is an acceptance of a dedicated street by some municipal act or public usage, the public acquires no rights therein. Hercules Trust Estate v. Gauzzi, 117 N. J. Eq. 565; 117 Atl. Rep. 99.

See R. 8. 46 :23-8, which reads as follows:

“The approval of any map of lands in the manner provided by this chapter by the governing body of a municipality having control of the streets and highways of the municipality shall in nowise be construed as an acceptance of any road, street or highway indicated thereon; nor shall any such approval in any way obligate this state, or any county or municipality therein to maintain or exercise jurisdiction over such roads, streets or highways.”

See New York and Long Branch Railroad Co. v. South Amboy, 57 N. J. Law 252; 30 Atl. Rep. 628; Darling v. Mayor, &c., of Jersey City, 73 N. J. Eq. 318; 67 Atl. Rep. 709; United New Jersey Railroad and Canal Co. v. Crucible Steel Company of America, 85 N. J. Eq. 7; 95 Atl. Rep. 243; affirmed, 86 N. J. Eq. 258; 98 Atl. Rep. 1087.

On or about September 29th, 1945, the complainant made application to the Board of Commissioners of Lyndhurst to open the street for public use. That application implies that there had been no acceptance of the street as a public right of way by the local government. The commissioners did not grant the application.

When the complainant erected its buildings on the lands adjacent to the lands of the United Cork Company in 1919, the latter’s buildings had already been erected upon the alleged street. For approximately twenty-five years thereof, the complainant made no objection to these alleged encroachments, and asserted no right of user. This court still adheres to the principle declared in the time honored maxim that “Equity aids the vigilant and not those who slumber on their rights.”

Since the westerly line of complainant’s land lies approximately 72 feet from the easterly line of Chase Avenue, it cannot be considered an abutting owner. Under the circumstances, the complainant not being an abutting owner would not under our decisions be entitled to the equitable relief it seeks in this action. Morris & Essex Railroad Co. v. Prudden, 20 N. J. Eq. 530; H. B. Anthony Shoe Co. v. West Jersey Railroad Co., 57 N. J. Eq. 607; 42 Atl. Rep. 279; United New Jersey Railroad and Canal Co. v. Crucible Steel Company of America, supra; Morrison v. Standard Oil Company of New Jersey, 105 N. J. Eq. 104; 147 Atl. Rep. 161; Con Realty Co. v. Ellenstein, 125 N. J. Law 196; 14 Atl. Rep. (2d) 544.

It is conceded that the buildings ÍTos. 10 and 11a which encroach upon the alleged public avenue were erected in 1940 and 1941 at a cost of $2,000 and $5,000, respectively. They were erected without objection on the part of the complainant, and no action with respect to the alleged encroachment was instituted until December 15th, 1945, when building Eo. 11 was completed at an expense of $10,000. I feel that the complainant’s attitude in this situation estops it from complaining. O’Connell v. Holton, 91 N. J. Eq. 4; 107 Atl. Rep. 37.

While the complainant argues that the defendant has created a private and public nuisance, there appears to be no such proof, and I do not find that the complainant has suffered any irreparable loss at the hands of the defendant. It is declared in Vaszil v. Molnar, 133 N. J. Eq. 577; 33 Atl. Rep. (2d) 743, that where an injunction is sought to restrain an action or conduct which will create or result in a nuisance, the proofs must disclose that the apprehension is well grounded; that the danger is real and immediate, and that the injury is material. The evidence here submitted by the complainant falls short of these requirements.

An injunction will not be granted to restrain a business lawful in itself unless a clear case of nuisance is established, and the evidence thereof must be convincing and free from contradiction. Stohf v. Passaic Piece Dye Works, 108 N. J. Eq. 46; 153 Atl. Rep. 707; Hey v. Seifert & Baime, Inc., 95 N. J. Eq. 502; 123 Atl. Rep. 106.

The evidence here submitted shows that the defendant is operating its plant carefully. It has adopted modem methods and required safeguards in the conduct of its business.

Under the circumstances, I feel that the bill should be dismissed, and shall advise an order to that effect.


author: Parker, J.

text:
    ADELA H. CORDICH, PERSONAL REPRESENTATIVE OF ESTATE OF ANTHONY CORDICH, DECEASED, PLAINTIFF, v. VIKING AIR TRANSPORT CO., INC., ALSO KNOWN AS VIKING AIR TRANSPORT COMPANY, A CORPORATION OF THE STATE OF CALIFORNIA, DEFENDANT.
    Decided November 13, 1946.
    Before Justice Parker.
    Por the defendant, W. Howard Demurest,

    . (Plaintiff not represented by counsel.)
   Parker, J.

The suit is by a party described as “personal representative of estate of Anthony Cordieh, deceased,” against a corporation of California based on an airplane accident which occurred in Virginia, while the plane was en route to Texas.

The statute (R. 8. 2:47-2; N. J. 8. A. 2:47-2) provides that except where there is a probated will—which apparently is not' the present case—the suit shall be in the name of an administrator ad prosequendum. The present plaintiff describes herself merely as “personal representative” of the estate of deceased. This, passing other objections, is dispositive of the present action.

The complaint will be struck out and the summons quashed.


author: Habtshobne, C. P. J.

text:
    Essex County Court of Common Pleas.
    ROBERT MONTE, PETITIONER-APPELLANT, v. GENERAL MOTORS CORP., RESPONDENT-APPELLEE.
    Decided November 18, 1946.
    Eor the petitioner-appellant, Abram, A. Golden.

    For the respondent-appellee, Reid, Kelly & Flaherty (by Isidor Kalisch).

   Habtshobne, C. P. J.

The petitioner-employee, Monte, was a helper at the time of his injuries, acting under the orders of one Burfield. At Burfield’s direction, they both went to the aid of another workman, Spin ola, with whom Monte had had no previous personal relations of any moment, who was working on an acetylene gas tank with a wrench, which did not suffice, so Burfield told Monte to go get another wrench. Apparently Monte took his own time about doing so, for he admits that Spinola called to him once, or perhaps twice, “If you are going to get it, get going.” To this Monte replied, “Who made you my boss?” adding some unpleasant epithets. Thereupon, Burfield, the foreman, seeing that Monte, instead of going to get the wrench, as ordered, was engaging in a verbal dispute with Spinola, went to get the wrench himself. When he returned he found Monte lying on the floor, with a bloody face.

What happened while Burfield was getting the wrench, and the petitioner, Monte, was engaging in the quarrel with Spinola, is naturally somewhat in dispute. Monte says, that after he asked Spinola who made him his boss, Spinola came out of the cage, in which he had been working, toward Monte with a wrench “telling me what I was supposed to do and started to use abusive language” and thereafter struck him in the face, knocking him to the ground. During this time Monte claims that he was merely “pulling up the zipper on my lumber jacket” and neither attempted to strike Spinola nor called the latter names. Spinola, on the other hand (and we must bear in mind that he has no direct interest, as has Monte, in the present controversy) testifies that not only did Monte call him names, as above, but that thereafter “he also said he was going to take care of me, and he came towards me as if he were going to hit me,” with further epithets. This version seems to have been believed by the Bureau, which saw and heard the witnesses.

In any event, it is clear that both Monte and Spinola stopped the work they were directed to do—Monte to get the wrench, Spinola to shut off the tank—in order to engage in a personal quarrel, leaving Burfield, the foreman, to cany out his own orders himself.

The question thus is whether Spinola’s striking of Monte, in the course of this personal quarrel, which occurred during working hours and within the plant, constitutes a compensable accident.

True, the fact that Spinola’s blow, which caused the injuries and consequent disability, was intentional, does not prevent the incident from being an accident. The test there is not the status of the one causing the injuries, but that of petitioner, i. e., was it unexpected as to him? Geltman v. Reliable Co. (Court of Errors and Appeals), 128 N. J. L. 443 ; 25 Atl. Rep. (2d) 894. While there may be some slight question as to the unexpectedness of the blow, even to Monte, in view of his unyielding attitude, the more difficult question is, even assuming the incident to be an accident, whether such accident arose “out of, and in the course of, the employment.”

Here again, the test is the status of petitioner in that regard, not that of his assailant, who may well have been a third party, entirely disconnected from the employment. Gargano v. Essex County News, 129 N. J. L. 369; 29 Atl. Rep. (2d) 879; affirmed, 130 N. J. L. 559; 33 Atl. Rep. (2d) 905. The specific question is whether petitioner, at the time of the accident, was engaged in and about his employment, so that the accident arose in the course of the employment, and whether the accident was so connected with the employment as to arise out of it.

If petitioner had ceased acting in furtherance of his employment, and had deviated to a matter of concern personal to himself, not reasonably necessitated by his employment as incidental thereto, he would no longer be acting in the course of his employment. This, it would seem, was the very situation here. For not only was Monte engaged in a personal quarrel with Spinola, but he had become so engrossed in this quarrel, that he failed to obey orders, and his failure to obey such orders had required Burfield, the foreman, to do Monte’s work for him. Clearly, this action of Monte’s was not in furtherance of his employment, nor reasonably necessitated thereby, but was, on the other hand, a matter of concern purely personal to Monte. Furthermore, while in one sense this personal quarrel arose out of the employment, in that the employment gave rise to the situation which aroused the personal ill feelings between the two, it was not at all the fact that Monte was employed which inflamed Spinola into striking him, but Monte’s uncalled-for personal attitude, and failure to do the work directed, which angered Spinola and caused the blow.

Nor should undue stress be laid upon who was the technical aggressor. The question of who is the aggressor, while evidential, would not seem to be the true test in cases such as this, as distinguished from criminal proceedings, and proceedings at law for damages, where the illegality of the assault, based on a finding that defendant was the aggressor, is usually of the essence. In compensation proceedings, where, on the other hand, the responsibility of a third party to the incident—the employer—is the ultimate issue, the test is, as seen above (1) whether there is an accident, (2) whether the accident arises out of the employment, (3) whether the accident arises in the course of the employment. In such eases, the fact that the petitioner was the aggressor, would seem to be merely evidential as to the basic issue, whether petitioner’s injuries arose at a time, and under circumstances, legally disconnected from his employment.

True, there are cases from other jurisdictions, holding that where petitioner has not been shown to have been the actual physical aggressor, he can recover compensation for injuries received in a quarrel with another employee, with dicta in such cases to the effect that:

“Where men are working together at the same work disagreements may be expected to arise about the work, the manner of doing it, as to tools, interference with one another, and many other details which may be trifling or important. Infirmity of temper, or worse, may be expected, and occasionally blows and fighting.” Pekin v. Industrial Commission, 285 Ill. 31; 120 N. E. Rep. 530.

But in most of these cases, petitioner will be found either to have been strictly tending to business when attacked, or to have been compelled to defend himself from such attack at a time when he had been tending to business. Pekin v. Industrial Commission, supra; Verschleiser v. Stern, 229 N. Y. 192; 128 N. E. Rep. 126. Further, the New Jersey courts have so far refused to apply any such broad doctrine as that alluded to in the above dicta, having considered it important to ascertain whether or not the injured employee had “separated himself from his employment” in his quarrel at the time he was injured. Geltman v. Reliable Co., supra (at p. 448); 25 Atl. Rep. (2d) 897; Merkel v. Gillespie, 10 N. J. Mis. R. 1081; 162 Atl. Rep. 250.

Since it appears in the case at bar that petitioner, at the time he incurred the disability in question, was engaged, not in his employment, but had dropped his work to engage in a personal quarrel with a fellow employee, which he had started, at least in words, the accident in question would not seem to have arisen in the course, or out, of the employment, and the decision of the Bureau will be affirmed.


author: Delaney, C. P. J.

text:
    Passaic County Court of Common Pleas.
    JOSEPH GIRESI, PETITIONER-APPELLANT, v. OKONITE COMPANY, RESPONDENT-APPELLEE.
    Decided November 20, 1946.
    Por the petitioner-appellant, JS. Gustave Greemvald.

    For the respondent-appellee, Wilbur A. Stevens (Herbert A. McElroy, on the brief).
   Delaney, C. P. J.

This is another of the multiplying eases of inguinal hernia resulting from accidental injury.

The matter was heard in 'the Workmen’s Compensation Bureau on March 5th, 194.6, where, on motion of counsel for respondent-appellee (hereinafter called respondent), made immediately after petitioner-appellant (hereinafter called petitioner) had put in his proofs, the claim for compensation was denied and the petition dismissed. The application to dismiss was made on the grounds that petitioner had not had the attendance of a licensed physician within twenty-four hours after the occurrence of the hernia, and that he had failed to establish a descent of the hernia immediately following the cause. The last named ground was untenable, but the first, in view of the pronouncement of the Supreme Court in Black v. DeVries, 133 N. J. L. 368; 44 Atl. Rep. (2d) 386 (since followed by the same court in Harrison v. Curtiss-Wright Corporation, 49 Atl. Rep. (2d) 496), unanswerable.

On the face of the record before us, this is a genuine and meritorious instance of inguinal hernia resulting from an industrial accident. The evidence met and complied with four of the five tests prescribed by B. 8. 34:15-12, subdiv. x; N. J. 8. A. 34:15-12, subdiv. x, in such manner as to dispel all question of deception or imposture; and respondent’s own physician, whose “attendance” on the petitioner came three hours after the expiration of the statutory limit, found and reported him to be suffering from a hernia.

Meanwhile petitioner had “required” (but only in the derivative and primary sense of the verb, that is “to seek,” “to ask for”) the attendance of a physician. The mishap occurred at about seven o’clock in the morning of July 11th, 1944. Shorn his home he telephoned to respondent’s mill at about half past four in the afternoon of the same day, when he was informed that the doctor would not be at the plant until the next morning. Between eleven o’clock and midnight of the same day (that is, July 11th), he went back to the mill, and told his foreman of Jiis distress and of his inability to work and that he might as well return home. Upon the foreman’s suggestion that the doctor might still come in, petitioner stayed throughout the night, lying for the most part upon a couch, and going down at about six o’clock in the morning to the first-aid room, where he remained until examined by respondent’s physician at ten o’clock.

The eases in the Supreme Court, cited herein, are, of course controlling; and we are obliged to affirm the judgment of the Bureau and to find this apparently authentic case of traumatic hernia to be non-compensable.


author: Case, Chief Justice.

text:
    FREDERICK ATANASIO, PLAINTIFF-RESPONDENT, v. SAMUEL W. SILVERMAN, DEFENDANT-PROSECUTOR.
    Reargued November 22, 1946
    Decided December 2, 1946.
    Before Case, Chief Justice, sitting alone pursuant to the statute.
    For the plaintiff-respondent, John G. Flanigan.

    For the defendant-prosecutor, George G. Tennant.

   Case, Chief Justice.

The matter comes up on rule to show cause, issued May 37th, 1946, returnable June 15th, 1946, why an order should not be made directing that certain judgments owned by defendant Silverman be set off against a judgment held by the plaintiff, Frederick Atanasio. Proofs were taken under rule of court on May 31st, 1946. Final disposition was deferred to permit Atanasio to appeal from a then recent order in the District Court of the United States for the District of Mew Jersey denying him a discharge in bankruptcy. That appeal has lately been decided by the United States Circuit Court of Appeals adversely to Atanasio.

Atanasio holds a judgment against Silverman in the amount of $16,763.73 on verdict rendered January 16th, 1946, in a suit instituted in this court by attachment on May 31st, 1943. Silverman is the holder, by assignment, of three judgments against Atanasio in this court as follows: Louis V. Hinchliffe, conservator for the Labor Bank of Paterson, &e., v. Lillian DeLuea, Charles Atanasio and Frederick Atanasio, entered May 31st, 1934, in the amount of $4,577.30, assigned to Silverman December 4th, 1944, and recorded in the Supreme Court clerk’s office on April 1st, 1946; Equitable Trust Company v. Frederick Atanasio in the amount of $5,323.12, entered January 3d, 1934, assigned to Silverman January 28th, 1946, and recorded in the Supreme Court clerk’s office January 31st, 1946; Ridgefield Park Trust Company v. Felix Flenz and Frederick Atanasio entered June 12th, 1933, in the amount of $2,695.46, assigned to Silverman February 11th, 1946, and recorded in the Supreme Court clerk’s office on March 5th, 1946. Those judgment amounts are largely increased by interest accruals.

The application by Silverman is to set off his assigned judgments against the above mentioned judgment obtained by Atanasio against him. It is argued on behalf of Atanasio that (1) the Hinchliffe judgment may not be used as a set-off against plaintiff’s judgment because it was in the ownership of Silverman prior to the entry of Atanasio’s judgment against him and therefore, under the provisions of B. 8. 2 :26-190, et seq., has lost its virtue as a matter of set-off, and (2) that the Equitable Trust Company and the Ridge-field Park Trust Company judgments were not subsisting rights in the defendant, Silverman, at the time plaintiff’s action against him was commenced and, therefore, under Johnson v. Kaiser, 40 N. J. L. 286, and Faherty v. Branegan, 112 Id. 134, may not be used as set-offs.

If I correctly grasp those points, they amount to a proposition that if A holds a judgment obtained by him in a suit against B and B holds a judgment against A, B may not set off his judgment against A’s judgment unless B’s judgment was a subsisting right in B at the time A commenced his action against B and, further, unless B pleaded that claim as a defense or set-off against A’s suit. I do not understand that to be a correct statement of the law. It will be noted that Silverman did not own any of his judgments at the time Atanasio began his action by attachment on May 21st, 1943. He acquired the Hinchliffe judgment before Atanasio’s suit reached judgment; the other two, later.

Even if it be conceded that a judgment is such a debt or demand as to be fully within the application of the statute on “set-off” (R. S. 2:26-190), it must, I think, nevertheless be true that a judgment acquired by a defendant after a suit against him was commenced is not within the application of the statute and is not forestalled from later being set off against the judgment procured in that suit. Whitaker v. Turnbull, 18 N. J. L. 172; Johnson v. Kaiser, supra; Faherty v. Branegan, supra, are to the effect that a claim, to be a valid set-off in an action against the holder thereof, must have been a subsisting right in him at the time the action was commenced. But we have a line of eases permitting the practice of setting off a later judgment against an earlier one going as far back as Coxe v. State Bank, 8 Id. 172. In Brown ads. Hendrickson, 39 Id. 239, particular recital is made of Alliance Bank v. Holford, 16 C. B. (N. S.) 460, wherein execution on a judgment was stayed until an action by the defendant had ripened into judgment, which judgment, when entered, was allowed to be set off against the other. Note also the line of. reasoning in McAdams v. Randolph, 42 N. J. L. 332. The practice of setting one judgment against another is thoroughly established. Cf. Brown v. Hendrickson, supra; Phillips v. MacKay, 54 Id. 319, and Murray v. Skirm, 73 N. J. Fq. 374. The authority as stated in Phillips v. MacKay is:

“The power of the court to order one judgment to be set off against another when the judgments are mutually enforceable by the parties is an exercise of the equitable jurisdiction of the court, and will be allowed upon such terms as will promote substantial justice.”

It was said by Mr. Justice Dixon in Terney v. Wilson, 45 N. J. L. 282, 284:

“The right to set off one judgment against another cannot attach until the party seeking the set-off has become both a judgment creditor and a judgment debtor of the person against whom it is sought.”

Plaintiff advanced the further point that the application should be denied upon equitable grounds. That contention would be convincing if sustained by the facts. The right to set off one judgment against another was taken over from the practice in equity and is administered in the law courts on equitable principles. Terney v. Wilson, supra; Schautz v. Kearney, 47 N. J. L. 56; Phillips v. MacKay, supra; Laubsch v. West New York Silk Mill Co., 57 Id. 234; Flavell v. Britton, 56 Id. 218. But it is a right to be determined according to established principles of equity and not as a matter of untrammeled discretion. Murray v. Skirm, supra. I have reviewed the papers and the transcript with that principle in mind and find that the equities do not weigh against granting the set-off. It is suggested that the defendant purchased the judgments at a nominal consideration speculatively for the express and sole purpose of defeating the plaintiff’s judgment claim and that the plaintiff’s embarrassing position with respect to the three judgments under assignment is due to the fact that he failed to prosecute proceedings in bankruptcy to the point of a discharge and has lately been unable to obtain his discharge therein. But these suggestions, in so far as they relate to the defendant’s activities, do not find substance in the proofs; and the matter of the discharge in bankruptcy was, we are bound to assume, equitably determined by the United States courts.

I conclude that the rule should he made absolute.

Mr. Flanigan stated orally at the argument that he considered he was entitled to an attorney’s lien for services rendered by him to the plaintiff. That matter is not properly before me for decision and my finding herein carries no inference, pro or con, thereon. The order, however, should not touch the taxed costs. They belong to the attorney. Phillips v. MacKay, supra. I am signing the order submitted by Mr. Tennant at the argument, to which, however, I have added a direction that the order shall not touch the taxed costs.


author: Kreamer, Commissioner.

text:
    Division of Tax Appeals.
    IN THE MATTERS OF APPEALS FROM JUDGMENTS OF THE SOMERSET COUNTY BOARD OF TAXATION DISMISSING TWO COMPLAINTS OF CHRISTOPHER G. HORNER, COLLECTOR OF THE TOWNSHIP OF HILLS-BOROUGH, CONCERNING INTANGIBLE PERSONAL PROPERTY WHOLLY OMITTED BY THE ASSESSOR FROM THE ASSESSMENT LISTS AND DUPLICATES OF THE TAXING DISTRICT OF THE TOWNSHIP OF HILLS-BOROUGH FOR THE YEARS OF 1942 AND 1943, ALLEGED TO BE IN POSSESSION OR UNDER CONTROL OF WALTER C. PARKER AND OTHERS AS TRUSTEES UNDER A TRUST COMMONLY KNOWN AS THE “DUKE ENDOWMENT.”
    Decided November 12, 1946.

      For the petitioner, Edward R. McQlynn, Arthur B. Smith and Harry E. WaTburg (by Edward R. McQlynn).

    For the trustees of the “Duke Endowment,” Pitney, Hardin, Ward é Brennan (by William J. Brennan, Jr.).

   Kreamer, Commissioner.

On November 20th, 1943, and on November 24th, 1944, the Township of Hillsborough by virtue of R. S. 54:3-20; N. J. S. A. 54:3-20 filed separate complaints with the Somerset- County Board of Taxation alleging that certain specified intangible personal property consisting of stocks and bonds in the possession or under the control of the trustees of “Duke Endowment” was wholly omitted from the assessment rolls for the years 1942 and 1943, respectively. Both of these complaints and the subsequent denials of relief sought under them through the Somerset County Board of Taxation are the subject of the present appeals now before this body for its determination and will be considered together, since both involve the same factual and legal issues.

Judgments of the Somerset County Board were sought under these complaints whereby $114,018,228 for the year .1942 and $137,453,591 for the year 1943 would be added to the tax rolls of Hillsborough. Both of these figures were specified as the true value of the stocks and bonds as of the respective assessing dates. The omitted assessments were sought to be added in the name of fifteen trustees (under authority of R. S. 54:4-10; N. J. S. A. 54:4-10), it being alleged that the said intangibles were in their possession or under their control.

The facts are not in dispute. The stocks and bonds involved in these appeals are the subject-matter of a trust indenture dated December 11th, 1924, which all parties herein have chosen to identify as an inter vivos common law trust. The settlor of this trust agreement was one James B. Duke, who .was a resident of the Township of Hillsborough at the time of execution of the trust indenture. Mr. Duke died prior to the assessing dates for the years 1942 and 1943.

The trust so created is commonly known as the “Duke Endowment” and the trustees maintain a business office in Koekefeller Plaza, New York City, New York. None of the evidences of the intangibles involved, namely the stocks and bonds themselves, is located in this state nor is the trust administered or controlled in this state by any of the trustees. This trust indenture provides, under the eighth article thereof, as follows:

“This Indenture is executed by a resident of the State of New-Jersey in said State, is intended to be made, administered and given effect under and in accordance with the present existing laws and statutes of said State, notwithstanding it may be administered and the beneficiaries hereof may be located in whole or in part in other states, and the validity and construction thereof shall be determined and governed in all respects by such laws and statutes.”

The foregoing quotation from the trust instrument is included in this recital because, as will appear, counsel for Hillsborough regards it as significant in establishing a taxable situs in Hillsborough.

It was conceded by the Township of Hillsborough that all of the trustees, with the exception of Albert H. Sands, Jr., and Doris Duke Cromwell, were non-residents of the State of New Jersey. The former was a resident of Westfield, Hnion County, New Jersey, as of the assessing date in the 1942 ease but was a non-resident as of the assessing date in the 1943 case. As to Doris Duke Cromwell the record is barren of anything that would satisfy this body as to her place of residence. The township, in its petition of appeal in the 1942 case, alleged that her residence was in Hillsborough but never went beyond that bare allegation and submitted nothing of any probative value showing residence in Hillsborough. Thus it was not established that any of the trustees resided in the Township of Hillsborough as of the assessing date in either the 1942 or the 1943 case.

In both the 1942 and 1943 cases, notices of the filing of the complaints were served upon the trustees by registered mail to those whose addresses were known, and by leaving fifteen copies with the secretary of the “Duke Endowment Trust” at the business office in New York City. In only one instance was personal service attempted; that was in the 1942 case upon Albert A. Sands, Jr., by leaving copies at his residence in Westfield, New Jersey.

On June 5th and December 15th, 1944, respectively, judgments of the Somerset County Board of Taxation were entered dismissing the complaints for lack of jurisdiction over the persons of the trustees and over the subject-matter. The reversal of both of these judgments is sought by these appeals.

Petitioner also challenges the propriety of several orders entered by the County Board in both matters while they were pending before that body. Briefly, those orders involve the quashing of a number of services on the trustees, the denial of an application by the petitioner for an order compelling the appearances of certain witnesses and the production of certain records and the denial of an application by the petitioner for an order designating the manner and form of service to be made upon the trustees. It will not be necessary to pass on the propriety or correctness of these interlocutory orders, since they can in nowise have a bearing upon the conclusion of this board.

After these appeals were filed, counsel for trustees moved for their dismissal on the ground of lack of jurisdiction over the persons of the trustees and over the subject-matter. This board determined that the matters should not be disposed of on motion and affidavits and accordingly set the matters down for formal hearing. The sole issue before us now is the question of jurisdiction of Hillsborough to tax these intangibles.

Counsel for the township contends that jurisdictional or taxable situs of the trust exists in Hillsborough and bases this contention upon two factors:

(1) That the settlor was a resident of the township at the time of the creation of the trust and remained a resident until his death sometime prior to the assessing dates, and (2) that the trust instrument provides that the trust is to be administered in accordance with the then existing laws of this state.

We fail to see in what manner such factors operate to create a jurisdictional or taxable situs in Hillsborough. Since the power of taxation is not inherent in any political subdivision of the state, but must be conferred by proper legslative enactment (1 Cooley on Taxation (4th ed.), § 122; Township of Bernards v. Allen, 61 N. J. L. 228; 39 Atl. Rep. 716), we must look to the statute for the authority of Hillsborough to tax the subject intangibles in this instance.

R. S. 54:4—9; N. J. 8. A. 54:4r-9, is the section of our present Tax Act containing the necessary legislative mandate conferring jurisdiction upon the various taxing districts to assess all personal property. This section reads as follows:

“The tax on all tangible personal property in this state and on all taxable personal property of non-residents of this state, except as otherwise provided in this title, shall be assessed in and for the taxing district where the property is found. The tax on other personal property shall be assessed on each inhabitant in the taxing district where he resides on October first in each year.”

Particular attention should be paid to the second sentence, “The tax on other personal property shall be assessed on each inhabitant in the taxing district 'where he resides * * The phrase “other personal property” has been construed, as will be seen, to include intangible personal property. Mary McBride, Executrix of the Estate of Anthony Mari v. City of Jersey City, 19 N. J. Mis. R. 637; 22 Atl. Rep. (2d) 567; New Jersey Tax Reports (Supp. 1941), 122. This being so, the question that presents itself is whether intangible personal property may be assessed by a taxing district in the name of trastees, none of whom resides in the said district. We must conclude this question in the negative.

Since the assessment of these intangibles is sought in the name of the trustees under R. S. 54:A-10; N. J. 8. A. 54:4-10, which reads: “Personal property in the possession or under the control of a person as trustee * * * shall be assessed in his name as such * * *,” it is difficult to conceive how it may be argued that the “trustee” mentioned in this section is not the “inhabitant” designated in R. 8. 54:4^9; N. J. 8. A. 54:4^9. The inescapable logic of this is further borne out by the fact that both R. S. 54:4^9 and R. 8. 54:4-10; N. j. 8. A. 54:4-9 and N. J. 8. A. 54:4r-10, were once part of the same section known as section 301 of the General Tax Act of 1918. Any doubt on this score was resolved in the case of Arthur Elmore Halenbeck, Trustee, v. City of Hoboken, New Jersey Tax Reports 1934-1939, p. 107, wherein it was held that the trustee in whose name intangibles were sought to be assessed must be an inhabitant or resident of the particular taxing district.

The facts in that ease are analogous to those involved here. The taxing district of Hoboken levied an assessment upon intangibles against one Halenbeck, who was appointed trustee and executor under the last will and testament of one Hazeltine. Hazeltine had died a resident of Hoboken and had set up this trust in his will, said trust consisting of bonds and cash held for certain named beneficiaries with the said Halenbeck as trustee. Prior to the assessing date the intangibles were transferred by Halenbeck as executor to himself as trustee, so that the trust property was not part of the decedent’s estate as of that time. Also, prior to the assessing date, the trustee moved his residence to Massachusetts and took with him the trust assets. It was held that these intangibles were not taxable by Hoboken, the court stating:

“Section 301 of the General Tax Act, supra, provides that all tangible personal property shall be assessed in this state in and for the taxing district where said property is found; that all other personal property (which includes intangible personal property) shall be assessed to each inhabitant in the taxing district where he resides on the first day of October of each year; that personal property in the possession or under the control of a trustee shall be assessed in his name as such, separate from his individual assessment. The trust property, not being tangible and not being found in the taxing district of the City of Hoboken, and the trustee not being an inhabitant of that taxing district on the assessing date, or never having been a resident in that taxing district, the property was not subject to taxation in the City of Hoboken. If the property were taxable within this state, it would be taxable at the residence of the trustee.”

The ease of Paul Beardsley, Executor, v. Borough of Oakland, New Jersey Tax Reports 1912-1934, p. 228, is further authority for the view that a trustee must be an inhabitant of the taxing district to be taxable by that district. This case involved an assessment in the name of an executor for the year 1911', part of which included certain intangible property. The statute applicable was section 11 of the Tax Act of 1903 which read:

“The tax on all tangible personal property in the State and on all taxable personal property of non-residents of this State shall be assessed in and for the taxing district where such property is found; the tax on other personal property shall be assessed on each inhabitant in the taxing district where he resides on the twentieth day of May in each year; personal property in the possession or under the control of any person as trustee, guardian, executor or administrator, shall be assessed in his name as such, separate from his individual assessment, or in the name of any one of several joint trustees, guardians, executors or administrators, if the one of them having actual control or possession cannot be ascertained by the assessor.” Laws 1903, page 400.

Parenthetically, it should be noted that the foregoing section quoted was later amended to include a provision to the effect that property belonging to the estate of a deeedent must be taxed in the district wherein decedent died. But as of the date of the assessment involved in this case no such provision was contained in the act, so that the following quotation from the opinion is applicable to the case at bar:

“The requirement in this section that personal property in the possession of an executor shall be assessed in his name as such, in no way modifies the antecedent provision of the section that tangible property in the state shall be assessed in and for the taxing district where found and that the tax on other personal property shall be assessed on each inhabitant in the taxing district where he resides on the twentieth day of May. The result is that an executor is assessable for the intangible personal property of his testate in his possession in the taxing district in which he resides. The appellant in this case resided in the Borough of Oakland, and therefore all intangible personal property in his possession as executor on May twentieth had a taxable situs in that taxing district.”

See, also, John D. McGill Estates v. Jersey City, New Jersey Tax Reports 1912-1934, p. 117.

The record is clear that none of the trustees was a resident of Hillsborough. By reason of the statute and decisions construing it we view this as fatal to the jurisdiction of the township to assess these intangibles. The fact that the original settlor of the trust was a resident of Hillsborough during his lifetime is of no consequence, since the statutory mandate of residence of the trustee or trustees in the taxing district has not been met. Also, we fail to see the efficacy of the argument that article 8 of the trust indenture which provides that the trust is to be administered in accordance with the then existing laws of this state operates to grant jurisdiction to Hillsborough. This clause appears to have been included merely to resolve in advance any question of conflict of laws between states with respect to the “validity and construction” of the trust instrument and cannot effect the question of jurisdiction of this township to assess these intangibles.

Hi an< attempt to show that intangibles have a taxable situs apart from, any consideration of residence of the trustees, counsel for petitioner has cited the following cases: Tennant v. State Board of Taxes and Assessments, 95 N. J. L. 465; 113 Atl. Rep. 254; Swetland v. Swetland, 105 N. J. Eq. 608; 149 Atl. Rep. 50; Yardley v. Essex County Board of Taxation, 93 N. J. L. 290; 108 Atl. Rep. 299. We do not consider any of these eases applicable to the issue involved here. The Tennant case dealt with tangible personable property wherein the court properly determined that tangible personable property may he taxed under the statute in the taxing district where it is physically located. The Yardley decision involved intangibles belonging to an estate wherein it was held that under express provision of the statute the intangibles must be taxed in the district where the decedent died. The Swetland ease was not a tax ease, and in any event the language quoted by counsel from that decision with respect to the siim of inter vivos trusts has been criticized. See Cutts v. Najdrowski, 123 N. J. Eq. 481; 198 Atl. Rep. 885; Reiner v. Fidelity Union Trust Co., 126 N. J. Eq. 78; 8 Atl Rep. (2d) 175.

Our determination, as stated, is that the subject intangibles had no taxable situs in the Township of Hillsborough. Accordingly, the appeals will be dismissed and the judgments of the Somerset County Board of Taxation dismissing the complaints filed for lack of jurisdiction affirmed.

Judgments accordingly.