author: Lynch, J. S. C.

text:
    ERIC C. BAYER, ET AL., PLAINTIFFS, v. AIRLIFT INTERNATIONAL, INC., ET AL., DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided July 31, 1970.

      Mr. John W. Griggs and Mr. Richard J. Ryan for plaintiffs (Messrs. Morrison, Lloyd & Griggs).

      Mr. Adrian M. Unger for defendant Airlift International, Inc. (Messrs. Milton M. and Adrian M. Unger).

      Mr. Charles H. Hoens, Jr. for defendant Corporation Trust Company (Messrs. Lum, Biunno & Tomphins).

   Lynch, J. S. C.

This is an action by a stockholder against a corporation, Airlift International, Inc. (Airlift), and its transfer agent, Corporation Trust Company (C. T. 0.), for alleged wrongful refusal to transfer stock. Originally plaintiff sought a mandatory injunction compelling the transfer, together with damages. During the course of this proceeding the stock was actually transferred to plaintiff and therefore plaintiff now merely seeks damages for the alleged wrongful refusal to transfer. In broad terms the alleged reason for refusal asserted by defendants is that the stock was subject to a “voting trust” and plaintiff refused to accept the transfer without the legend noting that restriction. The matter is before this court on remand from the Appellate Division pursuant to its opinion dated January 10, 1968.

Defendants move for summary judgment on three grounds: 1) plaintiff’s acceptance of transfer of his stock, subsequent to the alleged wrongful refusals to transfer, amounts to an “election” which bars this suit for damages; 2) assuming that the refusals to transfer were wrongful, nevertheless plaintiff has suffered no recoverable damages and 3) res judicata, based upon a Florida suit instituted by Airlift wherein plaintiff, though a named defendant therein, failed to counterclaim for the damages which he here seeks.

In urging ground No. 2 above, defendant Airlift adopts the tactics which proved successful for it in a comparable case wherein a stockholder’s request to transfer was refused for reasons similar to those asserted for the refusals here. Cf., Berman v. Airlift International, Inc., 302 F. Supp. 1203 (D. C. N. D. Ga. 1969). There the court granted Airlift’s motion for summary judgment upon the ground that the plaintiff stockholder had suffered no damages.

The factual background is long and detailed. The Berman case recites its genesis at some length. For purposes of the issues here, the following facts suffice. On March 13, 1965, plaintiff acquired 150,000 shares of defendant Airlift for a purchase price of $61,500, or 41^ per share. On December 15, 1965, he surrendered them for transfer but was refused because of the absence of the voting trust legend. On February 28, 1966, he sold the 150,000 shares, receiving in return the sum of $31,325 in cash and 37,000 shares of Airlift.

On July 14, 1966, plaintiff submitted the 37,000 shares for transfer and again transfer was refused because of the absence of the voting trust legend and plaintiff refused to accept any shares with the legend on them.

On December 24, 1965, plaintiff had instituted the within action seeking a mandatory action against defendants to compel transfer of the 150,000 shares without the voting trust legend and also for money damages by reason of the refusal to transfer as requested by him. After acquiring the 37,000 shares on February 28, 1966, plaintiff, on January 3, 1967, filed an amended complaint with respect to the refusal to transfer those shares in July 1966. On April 14, 1967, on plaintiff’s motion for summary judgment, Judge Matthews ordered that the 37,000 shares be transferred to plaintiff free of restrictions. On April 19, 1967, plaintiff presented the shares to defendant C. T. C. for transfer. On April 20, 1967, the Appellate Division stayed the order of April 14, 1967, and defendants again refused transfer of the shares. On January 10, 1968, the Appellate Division reversed the April 14, 1967 order, holding in effect that there were factual and legal questions as to whether the 37,000 shares were properly subject to the voting trust at the time of the refusals to transfer.

On February 15, 1967, an action was started by defendant Airlift in the State of Florida for a declaratory judgment to establish the rights of 67 stockholders, including plaintiff Bayer, who held stock which was said to be subject to the voting trust. Bayer was named as a party defendant in that suit but apparently was not served and filed no pleadings therein. On October 3, 1967, an order was entered in the Florida aetion directing the transfer of the 37,000 shares to Bayer free and clear of any restrictions. Bayer and Airlift thereupon moved in the Appellate Division in this matter to vacate the restraint against transfer. The application was granted October 23, 1967, and the transfer to Bayer wras made on that day. Bayer sold the 37,000 shares on October 24 and October 25, 1967, at approximately $6.25 per share, for a total gross price of $231,150.

After remand to this court defendants moved for summary judgment upon the three grounds stated at the outset of this opinion. Upon the argument of the motion, this court, conceiving that some factual issues as to the propriety of the refusal to transfer would probably survive the motion (B. 4:46-2) and wishing to reach the questions as to “election” and “damages” as urged by defendants, resolved that the motion for summary judgment should be renewed, but upon an assumption that all refusals to transfer the stock were actually wrongful. With that assumption the questions of “election” and “damages” are ripe for decision. The court therefore directed that testimony be taken on the issue of damages. Upon such proofs defendants were to renew their motion for judgment. Subsequently proofs were taken, defendants moved for judgment in their favor, and it is that motion which we are here deciding.

At the outset, plaintiff contended that the alleged wrongful refusal to transfer his stock occurred on three separate dates: a) December 15, 1965, with respect to the 150,000 shares which he originally acquired; b) July 14, 1966, when transfer of the 37,000 shares was first refused and c) again upon submission for transfer of the same 37,000 shares on April 19, 1967, in and about the time of this court’s previous order for summary judgment and its stay by the Appellate Division.

In response to plaintiff’s reliance upon the dates of December 15, 1965, and July 14, 1966, defendants contended that, as of those dates, plaintiff suffered no damage, even assuming the wrongful refusals to transfer, because he ultimately received more for the shares than he might have received at either of those two times. After some disputation of this assertion by plaintiff, at oral argument on May 8, 1970, he conceded that defendants’ position was correct and no damages would flow to him, assuming a wrongful refusal to transfer on those dates.

Plaintiff now stipulates that the only date of alleged wrongful refusal to transfer upon which he relies is April 19, 1967. The stock was selling for approximately $10 per share on that date.

Defendants assert that any alleged wrongful refusal to transfer on April 19, 1967, cannot give rise to a cause of action for damages for the reason that the tort which plaintiff asserts against defendants is that of conversion, and that tort was “complete” on July 14, 1966, when the 37,000 shares were presented for transfer and it was first refused. Once having been completed on that day, say defendants, no new cause of action for another conversion of the same stock could arise on the subsequent date of April 19, 1967.

We shall consider seriatim defendants’ three grounds upon which they urge a dismissal of the complaint.

(A)

Defendants' Abutment That Plaintiff's Acceptance of the Stock Constituted an Election Bakbing Damages.

In this respect defendants’ argument is that in cases involving a wrongful refusal to transfer the stockholder is confronted with an election, i. e., he may either accept the stock or sue for damages in conversion and recover the value of the stock, but he may not get the stock and “damages” as well. They rely heavily upon Siegel v. Riverside Box & Lumber Co., 89 N. J. L. 595 (E. & A. 1916) and Virginia Public Service Co. v. Steindler, 166 Va. 686, 187 S. E. 353 (1936). Defendants’ reliance upon Siegel is misplaced.

The court said, 89 N. J. L. at p. 596:

The rule o£ damages in cases of this kind depends on the nature of the action. If the plaintiff claims special damages only and seeks to retain the stock, it would obviously be wrong to allow him to recover the value of the stock and retain the title too. If, however, the plaintiff claims for a conversion of the stock, so that upon payment of a judgment in the action the title would pass to the judgment debtor (2 Kent Com. (12th ed., note 1) 388; Singer Manufacturing Co. v. Skillman, 52 N. J. L. 263; Bauer v. Hess, 76 N. J. L. 257), he may recover its value. (Emphasis added).

Defendants misread Siegel. It was not a case, such as here, where plaintiff obtained the stock and then sued for special damages. Rather the plaintiff sued for the value of the stock. It is perfectly logical that, in that context, the plaintiff is not entitled to both the value of the stock and the stock itself. While defendants cite the case for the proposition that the special damages here sought are barred by reason of the Siegel decision that ease is cited in 12 Fletcher, Cyclopedia of Corporations, § 5523, p. 572, n. 93 (1957), for the proposition that: “And it has been held that instead of suing as for a conversion he may elect to retain the stock and sue for special damages only.” That is what plaintiff seeks here.

Since plaintiff here is not suing for the value of the stock Siegel is no bar to his recovery of special damages.

As to plaintiff’s reliance upon Virginia Public Service Co. v. Steindler, 166 Va. 686, 187 S. E. 353 (1936), I do not find that case persuasive. First, insofar as it appears to reject the so-called “New York rule,” (see infra) it does not conform to New Jersey law as applied in Durant v. Block, 113 N. J. L. 509 (E. & A. 1934) and implicitly approved in Dimock v. United States Nat. Bank, 55 N. J. L. 296, at 303, 304 (E. & A. 1893). Second, the opinion is somewhat confusing; it cites its prior decision in the same case, reported as Steindler et al. v. Virginia Public Service Co., 163 Va. 462, 175 S. E. 888 (1934), for the proposition that when a stockholder seeks to compel transfer of his stock which the corporation has wrongfully refused to transfer he is seeking specific performance, and “a court of equity will give him this relief * * * and such damages as he has suffered by reason of the corporation’s refusal to promptly comply with his demands * * (Emphasis added). (187 S. E. at 356). Third, if the second Steindler opinion is said to be authority for rejection of the “New York rule” then this court has some difficulty in reconciling the later opinion of the same Supreme Court of Appeals of Virginia in Morison v. Dominion Nat. Bank of Bristol, 172 Va. 293, 1 S. E. 2d 292 (1939), wherein the court said, in reciting the New York rule:

The correct rule, and the one enforced by this court for more than a quarter of a century, is to ascertain the highest market value of stock unlawfully converted by a pledgee between the date of conversion and a reasonable time after the owner has received notice of it. Miller & Co. v. Lyons, 113 Va. 275, 74 S. E. 194; Virginia Public Service Co. v. Steindler, 166 Va. 686, 187 S. E. 353, 105 A. L. R. 1413. After this highest intermediate value within the time stated is determined, credit is given as of the date of conversion. (Emphasis added), (at 293).

Fourth, Steindler appears to stand for the proposition that even though one has actually lost profits by reason of a wrongful refusal to transfer his stock, he cannot recover that loss. This does not comport with fundamental concepts of damages. It does not make whole the party who has been wronged and it runs counter to the better reasoned authorities.

The measure of damages is stated in Restatement of Torts, § 927, p. 647 (1939):

§ 927. Conversion or Destruction of a thing or of a legally protected interest therein.
Where a person is entitled to a judgment for the conversion of a chattel or the destruction of any legally protected interest in land or other thing, the damages include.
(a) the exchange value of the subject matter or the plaintiff’s interest therein at the time and place of the conversion or destruction, or a different value where that is necessary to give just compensation, and
(b) the amount of a/ny further loss suffered as the result of the deprivation, and
(c) interest from the time at which the value is fixed or compensation for the loss of use. (Emphasis added).

See, infra, Comment e as to commodities which fluctuate in value.

Obviously, the purported effect of the second Steindler decision would deny the relief afforded under clause (b) of said rule, for it would deny recovery for any loss of profits caused by a wrongful refusal to transfer.

For these reasons, I do not consider that Virginia Public Service Co. v. Steindler, supra, should he followed here.

I therefore conclude that by accepting transfer of the subject stock on October 23, 1967, plaintiff is not precluded from seeking damages for defendants’ prior alleged wrongful refusals. If plaintiff can prove damages according to the proper measure thereof, he may recover them. Defendants’ ground (a) is therefore rejected as a basis for summary judgment in their favor.

(B)

Has Plaintiff Suffered Recoverable Damages ?

There are several different approaches to the question of the measure of damages in the case of -wrongful refusal to transfer stock. Cf., Dimock v. United States Nat. Bank, supra, 55 N. J. L. at 303, 304; Annot., “Remedy for refusal of corporation or its agent to register or effectuate transfer of stock.” 22 A. L. R. 2d 12, § 15. Some apply the value of the property at the time- of the conversion as the measure of damages. In Markham v. Jaudon, 41 N. Y. 235, it was held that the measure of damages was the highest market price between the time of conversion and the trial. But Markham was subsequently overruled by the Court of Appeals and there was established what has become known as the “Hew York rule,” i. e., that the highest intermediate value between the time of the conversion and a reasonable time after the owner has received notice of it is the measure of damages. Cf., Dimock, supra, 55 N. J. L. at 303. Eor our purposes it is helpful to understand the rationale of the New York rule:

The principle upon which this doctrine rests is the consideration that the general rule that, in an action for a conversion, the market value of the property at the time of the conversion would afford an inadequate remedy, or rather no remedy at all, for the real injury, which consisted in the wrongful sale of property of a fluctuating value at an unfavorable time, chosen by the broker himself. Hence, the cost of replacing the securities by a purchase in the market, allowing a reasonable time for that purpose, has been regarded as the proper measure of damages. As was said by Mr. Justice Bradley in Galigher v. Jones, 129 U. S. 193, 9 S. Ct. 335, 32 L. Ed. 658: ‘A reasonable time after the wrongful act complained of is to be allowed to the party injured to place himself in the position he would have been in had not his rights been invaded.’ * * * In New York, and in most of the sister states, as well as in the supreme court of the United States, the formula which has been called the New York rule has been adopted, and is the rule which will accomplish the most complete justice in the ordinary transactions between the broker and his customer dealing in stocks when an unauthorized sale is the act of conversion [55 N. J. L. at 304]

la Durant v. Block, supra, the New York rule was applied and two trading days was held to be a reasonable time within which the stockholder could determine the course he wished to take with respect to his stock.

The New York rule has since gained wide support in view of its fairness in cases in which mere value at the time of the conversion is insufficient, due to the fluctuating value of the property involved, to do justice to the aggrieved party. See, Durant v. Block, supra; Gervis v. Kay, 294 Pa. 518, 144 A. 529 (1928); B. L. Blair Company v. Rose, 26 Ind. App. 487, 60 N. E. 10 (1901); Wyndham, Inc. v. Wilmington Trust Co., 5 Del. Super. 324, 59 A. 2d 456 (Del. 1948). In Restatement of Torts, § 927, p. 650, Comment e (1939), it is said that:

* * * if the subject matter of the conversion is a commodity which has fluctuated in value, the owner is entitled to the highest value which it reached in the market within a reasonable time after he discovered or had reason to know of the conversion. This is an equitable adjustment based on what it would have cost the deprived owner to purchase an equivalent amount of the commodity at such time and thereby avoid loss or retain a profit. (Emphasis added).

It is presumably because he recognizes that an application of the New York rule in this case would afford him no damages for the conversions of December 15, 1965, and July 14, 1966, that plaintiff now concedes that he is not entitled to damages for the refusals to transfer on those dates. Thus as of December 15, 1965, the average bid price for the stock was $1.69 per share, which would have produced a gross sale price of $62,530 for 37,000 shares as against Bayer’s ultimate sale for a total sum on October 24 and October 25, 1967, for a gross sum of $231,150, an average price of approximately $6.25 per share. On July 13, 1966, the highest asked price was 4% and on July 14, it was 4. If we were to take the highest asked figure of 4Ys on July 13, 1966, Bayer would have received $152,625. Therefore, since he ultimately sold the stock at a considerably higher return than was possible on either of the first two “conversion” dates, he suffered no loss. Needless to sayy at the hearing before this court on the instant motion there, were no proofs on plaintiff’s behalf that he could have sold the- 37,000 shares at the date of either conversion, or within a reasonable time thereafter, at any figure approaching that for which he ultimately sold the stock.

It is in this context that plaintiff now asserts that he rests his claim for damages upon the refusal to transfer on April 19, 1967, when the stock sold for approximately $10 per share. Defendants reject this contention, first, upon the principle that, the conversion of the 37,000 shares having occurred on July 13, 1966, it was complete as of that daté and any subsequent demands and refusals, specifically April 19, 1967, cannot create a new tort.

Most cases discussing the proposition as to whether or not multiple conversions can occur do so in the context of determining when the statute of limitations begins to run. It is the general rule that the person deprived by the conversion cannot delay the operation of the statute by making repeated demands. Weiss v. Stalling, 130 N. J. L. 235 (E. & A. 1943). See also Restatement of Torts, § 899, p. 526, Comment c (1939), where it is said that: “A cause of action for the conversion of chattels is complete when the chattel is first tortiously taken or retained by the defendant; the person deprived cannot delay the operation of the statute by making repeated demands.” (Emphasis added). While the foregoing refers to “chattels” no reason is suggested why the rule should be any different with respect to conversion of stock.

When one applies the rationale of the New York rule of damages the soundness of the proposition that there should be no recovery for the alleged wrongful refusal to transfer plaintiff’s shares on April 19, 1967, becomes apparent. As said above that rule is based upon an “equitable adjustment” based on what it would have cost the deprived owner to go into the market and purchase stock equivalent to that of which he had been deprived by the wrongful refusal to transfer. So here, if Bayer had on July 14, 1966, or within a reasonable time thereafter, gone into the market and purchased 37,000 shares at the then current price, i. e., for an approximate total purchase price of $152,625, and if he had chosen to keep it until April 19, 1967, he would have been the beneficiary of its increase in value on the April date in the approximate total amount of $374,625. He would in no way have been harmed.

The New York rule is one of fairness. The reason why the prior rule (that the measure of damages was the highest value between the time of the conversion and the time of trial) was rejected was because it would be “unjust to allow (a stockholder) to recover the highest value of the stock at any time up to the time of trial no matter how great the interval between the conversion and the trial.” 22 A. L. R. 2d 68. As was said in Galigher v. Jones, 129 U. S. 193, 9 S. Ct. 335, 32 L. Ed. 658 (1889), in discussing the New York rule:

* * * the hardship which arose from estimating the damages by the highest price up to the time of trial, which might be years after the transaction occurred, was often so great that the court of appeals of New York was constrained to introduce a material modification in the form of the rule, and to hold the true and just measure of damages in these eases to be the highest intermediate value of the stock between the time of its conversion and a reasonable time after the owner has received notice of it to enable him to replace the stock, (at 201, 9 S. Ct. at 338).

Here plaintiff’s cause of action was complete on July 14, 1966, when the stock was selling for about $4 per share. He waited for approximately nine months thereafter and resubmitted the stock for transfer when it was selling for about $10 per share. If he were permitted a measure of damages based upon the latter refusal the corporate “wrongdoer” would be paying for damages which plaintiff could have avoided in July 1966, by acquiring other stock in the market at that time. The corporation would be at the mercy of the plaintiff’s choice of the highest market in the intervening period and the plaintiff would hear none of the risks which are inherent in the stock market. As was said in Pinkerton v. Manchester & Lawrence R. Co., 42 N. H. 424 (1861):

* * * it may be fairly assumed that a very large portion of the stocks purchased are purchased to be sold soon; and to give the purchaser, in ease of a failure to deliver such stock, the right to elect their value at any time before trial, which might often be several years, would be giving him not indemnity merely but a power, in many instances, of unjust extortion.

This is what we have in the case at bar. Combining the New York rule of measure of damages with the proposition that the tort is complete upon demand and refusal, the result here is that the plaintiff, upon the conversion in July 1966, could, within a reasonable time, have purchased an equal quantity of shares and thereby fixed his damages. Holding that stock until April 1967, when the stock reached 10, plaintiff could have then, if he so chose, sold his shares and have had the profit he now seeks from this court. But to permit him to take advantage of whatever high point in the market he chose, e. g., April 1967, would give him not indemnity but more than he lost, and to that extent compel an extortion against the corporate defendant.

One conceivable argument against application of the New York rule in this case is that, perhaps, within a reasonable time after the conversion of July 1966, he might not have had the money to go out into the market and to purchase an equal 37,000 shares, an opportunity which that rule imputes to him. But his financial inability to make that purchase, if such were the fact, is not an element to be considered. Ling v. Malcom, 77 Conn. 517, 59 A. 698, 699 at 702 (1905). In any event, if it were to be considered, it does not counterbalance other equitable considerations which support the New York rule nor the postulate that the April 1967 refusal did not create a new tort.

One other point raised by plaintiff should be disposed of at this time. It is plaintiff’s contention that he obtained a “no action” letter between July 1966 and April 1967, and that therefore the refusal to transfer on the latter date constitutes a new conversion. In the first place, the Appellate Division held herein that the kind of “no action” letter which he received was not that kind which was referred to in the voting trust agreement and which would free the stock of the voting trust impediment. Second, in the light of the legal principles set forth above the acquisition of a “no action” letter is irrelevant. If the plaintiff had done what the New York rule envisioned, i. e., purchased the stock in the open market after the conversion then, with or without the “no action” letter, he would have had the same number of shares to sell in April 1967, as he would have if there had been no conversion.

For these reasons, I find that the conversion was complete in July 1966, and any demand in April 1967, did not create a new tort. Plaintiff’s damages can only be measured by reference to a reasonable time after the July 1966 conversion. Since he has abandoned any claim for damages based upon it, and has offered no proof that the stock could have been sold within a reasonable time thereafter at a price higher than that at which it was ultimately sold, defendants’ motion should be granted. Berman v. Airlift International, Inc., supra.

(C)

Is the Floeiba Judgment Ees Judicata so as to Bab Plaintiff's Suit foe Damages Hebe?

Since we have decided that defendants’ motion for summary judgment should be granted on the ground last discussed, there is no necessity to consider the further ground of res judicata. However, in the interest of complete consideration of defendants’ contentious, brief attention will be paid to it.

It is said that plaintiff is barred from seeking damages here because he was a named defendant in the Florida action and failed to counterclaim for the damages which he here seeks though he had the opportunity to do so.

In the first place, while Bayer was a named defendant in the Florida case, he was not served. Therefore a question as to jurisdiction over him in the Florida court raises an issue of fact.

Second, the Florida action was not commenced until after this suit was begun here. The issue of damages was never raised and Bayer did not counterclaim therefor. Florida procedure, as stated in Berman v. Airlift International, supra, is that a * * * compulsory counterclaim is not, in fact, compulsory if e* * * (1) at the time the action was commenced the claim was the subject of another pending action * * *’. 302 F. Supp. at 1207. For that reason, the plea of res judicata was denied in Berman. Likewise here, for at the time the Florida action was commenced the claim for damages was already the subject of this action.

Conclusion

For the reasons set forth in (b) above, defendants’ motion for summary judgment is granted. Submit judgment pursuant to Rule 4:42-1. No costs.

      Though there are two named plaintiffs herein, the claim of plaintiff Robert O. Hewitt is moot. We are therefore concerned only with the claim of plaintiff Eric O. Bayer (Bayer), who will be referred to herein as “plaintiff.”

        Bayer, et al. v. Airlift International, &c. (4-894-66).

      On December 15, 1965, the stock was quoted at 1 5/8 to 1 1/2 bid, and asked prices ranged from 1 7/8 to 1 5/8. On July 14, 1966. bid prices ranged from 3 7/8 to 3 13/16 and asked prices from 4 1/8 to 3 15/16. Bayer sold the shares on October 24 and 25, 1967, at an average price per share of 6 1/4.


source: Caselaw Access Project

author: Yanoff, J. D. C.

license: Public Domain

text:
    ACADEMY SPIRES, INC., PLAINTIFF, v. WALTER BROWN, DEFENDANT.
    Essex County District Court
    Decided July 13, 1970.

      Mr. Norman Malzberg for plaintiff.

      Miss Nadine Taub for defendant.
   Yanoff, J. D. C.

This controversy concerns the applicability of Marini v. Ireland, 56 N. J. 130 (1970); Reste Realty Corp. v. Cooper, 53 N. J. 444 (1969), and Academy Spires v. Jones, 108 N. J. Super. 395 (Law Div. 1970), to a multi-family dwelling in which tenant seeks an abatement in rent by reason of landlord’s failure to supply services.

Landlord instituted a dispossess proceeding under N. J. S. A. 2A:18-53(b) for nonpayment of rent at the rate of $163.17, of which $156.17 is for the apartment and $7.00 for parking, for the months of December 1969 to March 1970, inclusive, plus a balance of $28.70 for the month of November 1969. Tenant deliberately withheld payment for three months because of alleged failure on the part of landlord to supply services, and denied that any additional rent was unpaid. I find as a fact that the rent for four months has not been paid, and that there is no balance due for November 1969.

Tenant asserts that the rental rate is $135 for the apartment, not $156.17. Landlord’s position with relation thereto is that the $156.17 figure is the approved F. H. A. rental for the five-room apartment in question, and I have no reason to question this fact. The evidence shows, however, that the agreement between tenant and landlord’s superintendent was that the apartment would rent for $135 per month. The approved E. H. A. amount is merely the maximum permitted rental and the tenant is not bound thereby. 12 U. S. C. A. § 1747c.

Tenant did not move. However, I take judicial notice that there is a great shortage of housing accommodations in Essex County. Evidence Rule 9(1). Therefore, it would be unreasonable to require tenant to move as a prerequisite to abatement of rent. Marini, supra.

The apartment in question is on the ninth floor of a complex housing 400 tenants, with a large parking area.

Tenant’s defenses fall into two categories: first, that landlord has failed to provide electric illumination in compliance with a Newark ordinance, for the parking lot, by reason of which the agreement for parking lot fee is illegal and unenforceable; and second, invoking Marini, supra, that landlord has failed, after notice, to supply essential services, rendering the premises uninhabitable, at least in part, entitling tenant to diminution in rent.

The first problem is determined easily. Factually, there is no evidence that landlord has failed to meet the standards set by section 7:424.6 of the Newark Building Code. Legally, the illegality specified affects only peripheral aspects of landlord’s performance in supplying parking space. This is not a case where the agreement was made for the purpose of violating a statutory prohibition, as in Brooks v. Cooper, 50 N. J. Eq. 761 (E. & A. 1893). Nor is it á case where a housing code explicitly prohibited rental of premises in violation of the code, as in Brown v. Southall Realty Co., 237 A. 2d 834 (D. C. App. 1968), or where a zoning ordinance prohibited the use of the premises for which it was leased, as in Ober v. Metropolitan Life Ins. Co., 157 Misc. 869, 284 N. Y. S. 966 (N. Y. City Ct. 1935); Becerra v. Hochberg, 193 Cal. App. 2d 431, 14 Cal. Rptr. 101 (D. Ct. App. 1961), and Howell v. City of Hamburg Co., 165 Cal. 172, 131 P. 130 (Sup. Ct. 1913). Nor is it a ease where plaintiff could not recover because he was not licensed for the pursuit for which he sought compensation, as in George H. Weinrott & Co. v. Burlington Housing Corp., 22 N. J. Super. 91, (Ch. Div. 1952). Rather, the facts are that tenant could and did use the parking area, despite the code violation, if any. Indeed, the precise area allotted to tenant was probably well lighted. A more appropriate analogy is Associated Realties Corp. v. Million Dollar Pier Operating Co., 6 N. J. Super. 369 (App. Div. 1950), in which the lease required tenant to use the premises seven days a week in violation of a “Sunday” law, and it was held that the fact that tenant could operate the premises six days a week overcame the defense of illegality. Accord: Stern Holding Co. v. O’Connor, 119 N. J. L. 291 (Sup. Ct. 1938). The illegality here was slight; tenant had already gotten the benefit of the parking area, and denial of recovery would amount to forfeiture. In such case landlord should not be denied its price. Restatement, Contracts, § 600, at 1115 (1932). See Rutkowsky v. Bozza, 77 N. J. L. 724 (Sup. Ct. 1909); Fox v. Rogers, 171 Mass. 546, 50 N. E. 1041 (Sup. Jud. Ct. 1898); Phend v. Midwest Engineering & Equipment Co., 93 Ind. App. 165, 177 N. E. 879 (App. Ct. 1931).

Whether Marini is authority for tenant’s position is more troublesome. Marini involved a two-family house in which tenant rented an apartment by a written lease specifying that the premises be used for no purpose other than a dwelling. There was no specific covenant to repair. The toilet bowl in tenant’s apartment leaked. Tenant gave repeated notice to landlord, who failed to repair. Thereupon tenant engaged a plumber, who made the repair at a cost of $85.72. The question was whether tenant could credit this expenditure against the rent in a dispossess proceeding. The trial court held that he could not; the Supreme Court reversed and sent the case back for trial. The Supreme Court ruled:

1. Tenant could raise the issue of diminution in amount of rent due by reason of landlord’s failure to supply services in a dispossess proceeding.

2. A covenant that the premises “were habitable and fit for living” was implied because “indispensable to carry into effect the purpose of the lease” (56 N. J. at 143).

3. Tenant’s covenant to pay rent and landlord’s covenant of habitability were not necessarily independent, and could be construed as dependent, “according to the intention of the parties and the good sense of the case” (at 145), in the context of a dispossess case. It thus followed the logic of Reste Realty Corp. v. Cooper, 53 N. J. 444 (1969), where contract concepts of dependency of obligation and failure of consideration were applied in a case in which tenant had been forced to vacate the premises by landlord’s failure to perform an implied covenant of habitability.

In my judgment, these basic principles control this case.

Although there is no written agreement, there was an agreement under which the premises were rented, in which the covenant of habitability was implied.

Tenant asserts this was broken because landlord failed to supply heat and water service to a ninth-story apartment; the. incinerator did not function, impairing garbage disposal; the hot water supply failed; water leaked into the bathroom; there were defects in Venetian blinds; the plaster in the walls was cracked, and the apartment was unpainted. Some of these clearly go to bare living requirements. In a modern society one cannot be expected to live in a multi-storied apartment building without heat, hot water, garbage disposal or elevator service. Failure to supply such things is a breach of the implied covenant of habitability. Malfunction of Venetian blinds, water leaks, wall cracks, lack of painting, at least of the magnitude presented here, go to what may be called “amenities.” Living with lack of painting, water leaks and defective Venetian blinds may be unpleasant, aesthetically unsatisfying, but does not come within the category of uninhabitability. Such things will not be considered in diminution of the rent.

It is argued that Marini is restricted to its facts, and is applicable only when tenant has made the repairs; that tenant’s choice is to repair or move out. The court’s language in Marini is cited:

If, therefore, a landlord fails to make the repairs and replacements of vital facilities necessary to maintain the premises in a livable condition for a period of time adequate to accomplish such repair and replacement s, the tenant may cause the same to be done and deduct the cost thereof from future rents. The tenant’s recourse to such self-help must be preceded by timely and adequate notice to the landlord of the faulty condition in order to accord him the opportunity to make the necessary replacement or repair, if the tenant is unable to give such notice after a reasonable attempt, he may nonetheless proceed to repair or replace. This docs not mean that the tenant is relieved from the payment of rent so long as the landlord fails to repair. The tenant has only the alternative remedies of making the rexjairs or removing from the premises upon such a constructive eviction. [56 N. J. at 146]

This lauguage, however, must be considered in the light of the facts before the court in Marini. On those facts the court granted relief to the tenant. To conclude that on other facts coming within the broad principles enunciated, not only in Marini but in Reste, the tenant may not have relief, would be to place an emphasis on form, technicality and fiction which has long been foreign to this State. Yannuzzi v. United States Casualty Co., 19 N. J. 201, 212 (1955); Edelstein v. City of Asbury Park, 51 N. J. Super. 368 (App. Div. 1958) ; Hackensack v. Rubinstein, 37 N. J. 39, 51 (1962), and many other cases, make that clear in matters of procedure. Henningsen v. Bloomfield Motors, 32 N. J. 358 (1960) ; Unico v. Owen, 50 N. J. 101 (1967); Newmark v. Gimbel's Inc., 54 N. J. 585 (1969), apply the same principles as to issues of substance.

There was conflicting evidence on the question of notice of defect to landlord, hut T find this fact in favor of tenant. The superintendent admitted knowledge of nonfunetion of heating system, hot water, elevator service and incinerator. • The only issue as to these was how long the deiiciency existed. '

Was the tenant required to make the repairs to this 400-unit complex as a prerequisite to availability of the relief given by Marini? If the answer to that question is in the affirmative, Marini has no meaning to tenants in multifamily dwellings who need the relief most. Obviously, few such tenants have the means to lay out the capital, and if they do, why should they repair someone else’s real estate on the chance of a reduction in rent? It is hard to believe that the Supreme Court intended such a result.

The thrust of law in this State is in the direction of consumer protection. Viewed from this aspect, Marini is in the stream of thought blazed by Henningsen v. Bloomfield Motors, supra, followed by Unico v. Owen, supra; Wollerman v. Grand Union Stores, Inc., 47 N. J. 426 (1966). Lemle v. Breeden, 462 P. 2d 470 (Hawaii Sup. Ct. 1969), and Pines v. Perssion, 14 Wis. 2d 590, 111 N. W. 2d 409 (Sup. Ct. 1961), both cited in Marini, are examples of application of this approach to landlord and tenant relations. In both it was held that a tenant need not move out of the premises in order to set up the defense of nonhabitability. More explicit is the language of Judge Wright in Javins v. First National Realty Corp., 428 F. 2d 1071 (D. C. Cir. May 7, 1970), where he said:

Our approach to the common law of landlord and tenant ought to be aided by principles derived .from the consumer protection cases referred to above. In a lease contract, a tenant seeks to purchase from his landlord shelter for a specified period of time. The landlord sells housing as a commercial businessman and has much greater opportunity, incentive and capacity to inspect and maintain the condition of this building. Moreover, the tenant must rely upon the skill and bona fides of his landlord at least as much as a car buyer must rely upon the ear manufacturer. In dealing with major problems, such as heating, plumbing, electrical or structural defects, the tenant’s position corresponds precisely with “the ordinary consumer who cannot be expected to have the knowledge or capacity or even the opportunity to make adequate inspection of mechanical instrumentalities, like automobiles, and to decide for himself whether they are reasonably fit for the designed purpose.

He continued:

Thus we are led by our inspection of the relevant legal principles and precedents to the conclusion that the old common law rule imposing an obligation upon the lessee to repair during the lease term was really never intended to apply to residential urban leaseholds. Contract principles established in other areas of the law provide a more rational framework for the apportionment of landlord-tenant responsibilities; they strongly suggest that a warranty of habitability be implied into all contracts for urban dwellings.

For academic discussion of the problems involved, see Schoshinski, “Remedies of the Indigent Tenant; Proposal for Change,” 54 Georgetown L. J. 519 (1966); Loeb; “The Low Income Tenant in California; A Study in Frustration,” 21 Hastings L. J. 287 (1970); Feldman, “Effective Remedies for Tenants,” 93 N. J. L. J. 481 (1970).

The most difficult aspect of this case is determination of the amount of abatement to which tenant is entitled. No expert testimony was produced to show the fair value of the premises without the services which landlord was required to supply. Tenant urges that this be done on a finding of fact that there has been a percentage reduction in use which entitles tenant to a corresponding abatement in rent. There is almost a complete absence of authority on the subject. The Model Residential Landlord-Tenant Code (Tent. Draft 1969), American Bar Foundation, § 2-207(1) (b) would entitle the tenant to withhold one-fourth of the rent accrued during any period when hot water is not supplied. Section 2~ 207(2) (b) would allow the tenant to procure substitute housing for as long as heat or water is not supplied (between October 1 and May 1), during which time the rent shall abate and the landlord shall be liable for any additional expense incurred by the tenant, up to one-half the amount of the abated rent. In Charles E. Burt, Inc. v. Seven Grand Corp., 340 Mass. 124, 163 N. E. 2d 4 (Sup. Jud. Ct. 1959), the court indicated that if the tenant remained in possession until successful disposition of ihe action, his rent liability would be limited to the difference between the lease-fixed rent and the reasonable rental value of the premises in their defective condition. Academy Spires v. Jones, supra, sets forth the same theory.

These approaches are compatible with tenant’s position. It is not inconsistent with rules generally applicable in determining damages.

It has been said that “No rule of damages capable of precise application in all cases can be laid down and followed. The proper and just method varies wtih the facts of the particular case.” Borbonus v. Daoud, 34 N. J. Super. 54, 60 (Ch. Div. 1955); Zeliff v. Sabatino, 15 N. J. 70, 74 (1954).

In McGormick, Damages (1935), § 27, at 101, the author states:

There are various modifications of the rule of certainty. They enable the courts, while holding up a high standard of certainty as an ideal, to avoid harsh applications of it. Among them are:
(a) If the fact of damage is proved with certainty, the extent or amount may be left to reasonable inference.
(b) Where the defendant’s wrong has caused the difficulty of proof of damage, he cannot complain of the resulting uncertainty.
(c) Mere difficulty in ascertaining the amount of damage is not fatal.
(d) Mathematical precision in fixing the exact amount is not required.
(e) If the best evidence of the damage of which the situation admits is furnished, this is sufficient.

Triers of fact daily translate personal injuries into money damages with relatively slight guidelines. Profits lost by reason of breach of contract may be recovered “if there are any criteria by which probable profits can be estimated with reasonable certainty.” Feldman v. Jacob Branfman & Son, Inc., 111 N. J. L. 37, 42 (E. & A. 1933). The language in Story Parchment Co. v. Paterson Parchment Paper Co., 282 U. S. 555, 51 S. Ct. 248, 75 L. Ed. 544 (1931), is appropriate :

Where the tort itself is of such a nature as to preclude the ascertainment of the amount of damages with certainty, it would be a perversion of fundamental principles of justice to deny all relief to the injured person. * * * In such ease, while the damages may not be determined by mere speculation or guess, it will be enough if the evidence shows the extent of the damages as a matter o? just and reasonable inference, although the result be only approximate, [at 563, 51 S. Ct. at 250]

The percentage-diminution approach advocated by tenant seems likely to produce results sufficiently accurate to be compatible 'with rules as to proof of damages set forth above. I am dubious that use of expert testimony could add to either accuracy or certainty. Certainly, if tenant were required to bear the cost of producing an expert witness, the effectiveness of the relief afforded by Marini would be diminished. I therefore accept the percentage abatement theory advocated by tenant.

There is a wide disparity between tenant and landlord’s testimony as to the extent of diminution of service, but landlord admits that heat, hot water, elevator service and incinerator use failed at various times during the period December 1969 to March 1970, and that repairs were made from time to time. Had landlord produced records of repair bills more precise determination of the periods during which service failed might have been possible. Tenant testified that in the child’s bedroom there ivas no heat during the entire period; that complaint was made to the superintendent without avail, and that the child slept in the living room by reason thereof. He testified that there was no hot water for substantial periods in November, December and March, as the result of which water was .heated on the stove for bathing; that the living room lacked heat in November and December; that two out of three elevators failed to function in November, December and two weeks in March, and that the incinerator was defective throughout the period.

The superintendent denied that the breakdowns were for such extended periods. He said that the heating system never broke down for more than six-hour periods; that a service repaired the elevators promptly; that the incinerator broke down for a day to a day and one-half in November, and two'' weeks in December, during whirh garbage cans were used. He attributed much of the difficulty with the incinerator to vandalism.

I am convinced that tenant exaggerated, and that the superintendent testified from ignorance. I find as a fact that there was a breach of the covenant of habitability, and that the diminution in rent of 25% is a fair amount. There will therefore be a judgment that tenant is indebted to landlord for rent in the amount of $433. If that amount is not paid within three days, a warrant for possession will issue.

No costs.


author: Lane, J. S. C.

text:
    VINCENT P. KEUPER, MONMOUTH COUNTY PROSECUTOR, PLAINTIFF, v. EDWARD N. WILSON AND ABERT LARGE, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided July 8, 1970.

      Mr. Elliot L. Katz, Assistant County Prosecutor, for plaintiff.

      Mr. Robert E. La Mura and Mr. Stanley Yacker for defendants (Mr. Robert E. La Mura, Attorney).
   Lane, J. S. C.

The Monmouth County Prosecutor instituted this action under N. J. S. A. 2A:115-3.5 to enjoin the showing and exposing to public view of the motion picture “Man and Wife” and for an order compelling the defendants to surrender to him the film for destruction in accordance with N. J. S. A. 2A:115-3.7. The matter is before the Court on final hearing.

The defendant Edward N. Wilson is the owner and operator of the Strand Theatre in Keyport, New Jersey. The defendant Albert Large (improperly designated as Abert Large) is employed by Wilson as a motion picture projectionist.

On Wednesday, June 10, 1970 the film was first shown at the theatre. On Friday, Juno 12, 1970 a warrant for the arrest of Wilson was obtained upon complaint of a detective of the Kevport police department charging a violation of N. J. S. A. 2A:115“2. Wilson was arrested that evening, and at that time the film was seized. On June 17, 1970 Wilson, Large and Institute of Adult Education, the owner of the film, filed a complaint in this Court (Docket C-2928-69) naming as defendants the chief of police of Keyport, the detective who signed the complaint, the magistrate who issued the warrant and the prosecutor of Monmouth County, seeking a judgment restraining the defendants from interference with the exhibition of the film on the ground that it was not obscene and its showing was constitutionally protected under the First and Fourteenth Amendments of the United States Constitution. An order to show cause issued that day directing the defendants to show cause on June 22, 1970 why they should not be restrained from making any arrests or issuing any warrants for alleged violation of A. J. S. A. 2A:115-2. After the hearing on the order to show cause the Court reserved decision. The following day, June 23, 1970, the Monmouth County Grand Jury handed up an indictment for a violation of N. J. S. A. 2A:115-2. Although the original film had been seized and was in- the possession of the prosecutor, Wilson obtained another copy and resumed showing of the film on June 23, 1970. The complaint herein was filed on June 24, 1970 alleging that the film “Man and Wife” was obscene and seeking to enjoin its showing. An order to show cause for a preliminary injunction to restrain the showing of the film until the final hearing was issued returnable July 2, 1970. A request for a temporary restraining order was denied. On June 25, 1970 a second warrant was issued for the arrest of Wilson upon complaint of an investigator of the Monmouth County prosecutor’s office alleging a violation of N. J. S. A. 2A:115-2. The film then being shown was not seized. Wilson filed a petition in Docket C-2928-69 on June 26, 1970 seeking to enjoin the defendants from any further arrests of him or his employees on the ground that such further arrests constituted harrassment and intimidation calculated to chill his First Amendment rights and those of the public. An order to show cause was issued returnable July 2, 1970 containing a temporary restraint. On June 30, 1970 the defendants filed an answer herein denying the material allegations of the complaint and counterclaimed for a declaration that the motion picture is not obscene. The answer demanded a hearing within one day in accordance with N. J. S. A. 2A:115-3.6. The matter came before the Court for final hearing on July 1, 1970. The order to show cause in this action for a preliminary injunction has been abandoned. In Docket C-2928-69 the defendants (one of whom is the plaintiff herein) now have consented to a preliminary injunction enjoining further arrests.

There was no pretrial conference. However, at the outset of the trial the parties agreed to the Court’s statement of the issues involved:

(1) Does the dominant theme of the film taken as a whole appeal to a prurient interest in sex; that is, a shameful or morbid interest in sex, going substantially beyond customary limits of candor in description or representation?

(2) Is the film patently offensive because it affronts contemporary community standards relating to the description or representation of sexual matters; community being nationwide (State v. Hudson County News Co., 41 N. J. 247, 262-266 (1963))?

(3) Is the film utterly without redeeming social value?

To be entitled to a judgment that the film is obscene and therefore not protected by the First Amendment, the plaintiff must prove by a preponderance of the evidence the affirmative of each of the three issues. If the plaintiff does not sustain that burden, it becomes the burden of the defendants to prove by a preponderance of the evidence the negative of any one of the three issues to be entitled to a judgment on the counterclaim.

Although N. J. S. A. 2A:115—1.1 defines obscenity, such definition must stay within the constitutional bounds laid down by the United States Supreme Court in Roth v. United States, 354 U. S. 476, 77 S. Ct. 1304, 1 L. Ed. 2d 1498 (1957), as refined in A Book Named “John Cleland’s Memoirs of a Woman of Leisure” v. Attorney General of the Commonwealth of Massachusetts, 383 U. S. 413, 86 S. Ct. 975, 16 L. Ed. 2d 1 (1966) (Memoirs). See Mishkin v. New York, 383 U. S. 502, 507-508, 86 S. Ct. 958, 962-963, 36 L. Ed. 2d 56, 61 (1966). The issues, therefore, are based upon the definition of obscenity stated in Roth and Memoirs.

The Court viewed the film which runs for 65 minutes. It begins with an introduction quoting from Dr. T. H. Van de Velde, the author of “Ideal Marriage.” There is an explanation of the physical and psychological sexual relationship between a man and his wife, and an explanation of the male and female reproductive organs and their functions. The balance of the film is devoted to a graphic demonstration of ten positions for sexual intercourse. There are four unclothed participants in the demonstration, the same man and the same woman always being paired. The impression is given that each couple is man and wife. During the demonstration there is dialogue at the beginning of each position pointing out the advantages of the particular position both as to procreation and as to enjoyment of the partners. The dialogue does not continue during the entire demonstration of any one position. The testimony shows that none of the positions demonstrated is considered abnormal. There is no discussion or demonstration of techniques in sexual arousal before or during intercourse. With the exception of an office scene for the clinical explanation the set remains the same, a well lighted bed.

The plaintiff presented only one witness, Louis B. You-mans, who was called to testify as an expert witness on each of the three issues. Mr. Youmans testified that he was an educator. After graduating from the Long Branch High School he attended the University of South Carolina for two years and then obtained a Bachelor’s degree in English from Monmouth College in 1963 and a Master’s degree in English at Rutgers-The State University in 1964. From June 1964 to September 1966 he was self-employed as private tutor and then from September 1966 to March 1970 was employed by Monmouth College as an ' instructor in English Literature. From September 1969 presumably to the end of the school year he did a certain amount of teaching in English at the Ocean County College. Except for the two years while attending the University of South Carolina and for a short time during his youth when he was in Vermont, he has been a resident of the State of New Jersey. There was no evidence that he had done any traveling. He testified that because he was an educator he was qualified as an expert to testify as to the issues primarily on the ground that the film purported to be educational.

The defendants objected to Mr. Youmans’ qualifications as an expert witness to testify as to any of the three issues. The Court reserved decision on the objection which must now be disposed of.

In City of Newark v. Humphres, 94 N. J. Super. 384, 390 (Cty. Ct. 1967), it was held that expert opinion is required as to each of the three tests. If expert testimony is not a requirement for a finding of obscenity, First Amendment rights would depend upon subjective determinations by juries or judges as the case may be. The question is not whether the work under consideration taken as a whole appeals to a pruient interest in sex to a particular jury or a particular judge but rather to the average man. Roth v. United States, supra, 354 U. S. at 489, 77 S. Ct. at 1311, 1 L. Ed. 2d at 1509. This Court does not feel that it is in a position to judge whether the film has a prurient appeal to the average man "without expert testimony. See Memoirs, supra, 383 U. S. 413, 427, 86 S. Ct. 975, 981-982, 16 L. Ed. 2d 1, 10. (concurring opinion of Justice Douglas). Contemporary community standards on a nationwide basis cannot be based upon the limited knowledge of the Court. There must be a basis in the Tecord to support a finding of what they are and of whether the work under consideration affronts such standards. That basis can only be supplied by-expert testimony. Whether a work has a redeeming social value cannot be left to the limited knowledge of a judge or jury. A particular work may have a redeeming social value in an esoteric field. A determination of the issue cannot be made without the assistance of expert testimony that is subject to cross-examination.

Was Mr. Youmans qualified as an expert as to any of the three issues? To qualify as an expert one must have “peculiar knowledge or experience not common to the world which renders their opinions founded on such knowledge or experience any aid to the court or jury in determining the questions at issue.” Rempfer v. Deerfield Packing Corp., 4 N. J. 135, 142 (1950). “* * * [T]he opinions of experts must be founded either upon facts within their own knowledge or, in the case of a hypothetical question, upon facts and inferences supportable by the proofs — i. e., evidence which there is a fair possibility the jury will accept.” Angel v. Rand Express Lines, Inc., 66 N. J. Super. 77, 85 (App. Div. 1961). The fact that one may be an expert in one field does not qualify him to testify as an expert in a field in which it is not shown he is qualified. Zampieri v. River Vale Tp., 29 N. J. 599, 611 (1959); Newman v. Great American Ins. Co., 86 N. J. Super. 391, 399 (App. Div. 1965). How expertise has been acquired is not important. “It is settled in this State that a person may be qualified to testify as an expert either by study without practice or by practice without study.” State v. Campisi, 42 N. J. Super. 138, 148 (App. Div. 1956), rev’d on other grounds 23 N. J. 513 (1957).

In Hewitt v. Maryland State Board of Censors, 243 Md. 574, 221 A. 2d 894 (Ct. App. 1966), the Court discussed the qualifications necessary for a witness to testify as an expert in an obscenity case:

* * * The average person, however, is certainly not qualified to give expert testimony in this area. The fact' that he might have a degree in education, sociology or theology does not, per se, make him qualified; nor does the mere fact that he is a social worker, a probation officer, a teacher, a priest, minister or rabbi. Something more is required. He need not, of course, be an authority but there must be an affirmative showing (and an opportunity to cross-examine thereon) that he is possessed of some special and sufficient knowledge and information, however acquired, which would elevate his opinion above the realm of conjecture, speculation or personal reaction, in respect of any one of the three elements of the test promulgated in Roth and expanded most recently in Ranny Hill. His knowledge and information may have been acquired in his business or in his profession or it might be the by-product of an avocation, sport or hobby. He may have sought it assiduously or he may have absorbed it casually. Mr. Crawford H. Greenewalt, for instance, is a chemist by profession. His occupation is chairman (formerly president) of E. I. du Pont de Nemours & Go. He is not an ornithologist. Yet there is probably not a court in the world which would not declare him qualified to testify as an expert on the coloring, configuration, classification and flight characteristics oí hummingbirds. The term ‘expert’ has many lights and shadows. It can denote a man who is a recognized authority and, perhaps as accurately, a fellow who once went to the city. * * * [221 A. 2d 900]

The Court then discussed the testimony that was adduced before the lower court and held that a supervisor of a group of probation officers in the Division of Juvenile Causes of the Baltimore Courts, a director of the Criminal Justice Commission, a rabbi, an ordained minister of the Congregational United Church, a Soman Catholic priest, a consultant in the Division of Juvenile Causes of the Baltimore Courts, and a housewife did not qualify as experts by any standards.

Mr. Youmans did not qualify as an expert as to any of the three issues involved in this matter. The mere fact that he had been an English instructor (his only claim to expertise) certainly did not qualify him to testify as to what would appeal to a prurient interest in sex in the average man. There was no testimony that by study or by experience he had any knowledge of the effect on the average man of scenes depicting sexual intercourse. He had no knowledge whatsoever of contemporary community standards. He had made no study of public acceptance of films showing sexual intercourse and had no experience as to such acceptance or lack thereof. If the subject of the law suit had been a work of literature, he might have been qualified to testify as to whether it had any redeeming social valne notwithstanding the inclusion of allegedly obscene passages. Certainly, however, he was unqualified to testify as to whether a film dealing in sexuality related to marriage presented as educational was utterly without redeeming social value. There was no evidence that he had made a study of or had experience with marriage or sex problems so as to be able to judge whether the film would have a redeeming social value related to sexual relationship in marriage. The objection will be sustained, and his testimony will be stricken.

It follows that the plaintiff has failed to sustain the burden of proof that the film is obscene. The complaint, therefore, will be dismissed.

By the counterclaim the defendants seek a judgment that in fact the film is' not obscene. The prayer in the counterclaim is cognizable in this Court. State v. Baird, 50 N. J. 376, 378 (1967); Sanitary Vendors, Inc. v. Byrne, 40 N. J. 157 (1963); Lucky Calendar Co. v. Cohen, 19 N. J. 399, 409 (1955), 20 N. J. 451 (1956). See also, Anderson v. Sills, 56 N. J. 210 (1970).

The defendants called four witnesses to testify as experts.

Dr. Alven B. Judd, certified by the American Board of Psychiatry and Neurology in psychiatry and child psychiatry, is a practicing psychiatrist, has done psychotherapy with couples having marital, difficulties, and has worked in the field of the relationship between violence and sex. In his professional capacity he has attended professional conventions with colleagues throughout the country. He has had an opportunity to learn what contemporary community standards are from his conversations with colleagues and from his exposure to and experience with the public as a result of his nationwide traveling. His background and work in psychiatry, his experiences in psychotherapy with couples having marital difficulties, and his knowledge gained from traveling ¿nd conferring with colleagues practicing throughout the country qualified him to testify as an expert witness as to all three of the issues. Although he testified that there was an element in the film that could appeal to a prurient interest in sex, it was his opinion that taken as a whole, as it must be, the film did not appeal to such an interest. He felt that the display of positions in sexual intercourse was educational. In Dr. Judd’s opinion the American attitude towards sex tends in the direction of rigidity. Such rigidity in the approach to sex between husband and wife results in marital discord. The redeeming social value is the education that can be derived from a viewing of the film which should lead to a softening of the rigid view toward sex in marriage.

Bruce Bahrenburg, movie critic for the Newark News, a leading newspaper in the State, testified as to the second issue. His qualifications as an expert are based upon his experience in his employment. He reviews films shown throughout the United States. He travels widely in the country and is familiar with the general type of moving picture being accepted by the public and consequently is familiar with the nationwide community standard as to the portrayal of sexual acts in motion pictures. The Court held that he was qualified as an expert. Mr. Bahrenburg testified that community standards do not prohibit an explicit portrayal of sexual acts where such portrayal is appropriate. In his opinion “Man and Wife” does not affront contemporary community standards relating to the description or representation of sexual matters and is not patently offensive.

Richard II, Siss, a clinical psychologist who is chairman of the Sex Education Committee of the Perth Amboy Public School System and is in private practice as a marriage, counsellor, was called as an expert witness on the third issue. In his practice as a marriage counsellor he had found that 95% of the persons coming to him as a result of marital discord lacked a knowledge of sexual intercourse. Where couples are limited to a specific position for sexual intercourse, they tend to bo inhibited in sexual adjustment which in turn leads to marital discord. Such limitation is usually because of lack of knowledge. If a person is well adjusted sexually within marriage, such person will normally make a good adjustment to the community. Knowledge of sex does not come naturally. It is acquired through education. For many people learning is best derived visually. Based upon these facts he testified that the film had redeeming social value. His qualifications as an expert, based upon his professional training and his vocation, were accepted by the Court on the third issue.

Reverend Newton W. Greiner, Minister of the First United Methodist Church, has been involved in premarital, marital and juvenile counselling on a day to day basis. He testified that the film had redeeming social value as an educational device in an area greatly in need of such. His experience has taught him that marital harmony is more likely where the sex act in marriage is engaged in for enjoyment as well as for procreation. His studies and experience have led him to the conclusion that for a marriage to be successful there should be total involvement for each partner. The major problems of people who have come to him for counselling have arisen from a lack of knowledge and understanding of sex. The people he has counselled have had inadequate knowledge of the techniques of intercourse and this lack of knowledge has caused maladjustments. He has recommended that couples whom he was counselling see “Man and Wife.” The very nature of his work qualified him as an expert witness on the third issue.

The Court is aware that there will be those who hold the belief that the showing of .sexual intercourse even between a man and wife is scandalous and obscene. The likes or dislikes, no matter how strongly held, of individual members of society cannot he a determining factor as to whether the film should be declared obscene and suppressed. Such persons need not pay the price of admission to see the film. There was no evidence of offensive advertising that might be deleterious to those under 18 years of age (in fact, the film was restricted to persons over 21 years of age) or that might be an “assault on individual privacy.” Redrup v. New York, 386 U. S. 767, 769, 87 S. Ct 1414, 1415, 18 L. Ed. 2d 515, 517 (1967). There was no evidence that the film was a “commercial exploitation of erotica solely for the sake of their prurient appeal” condemned in Ginsburg v. United States, 383 U. S. 463, 466, 86 S. Ct. 942, 945, 16 L. Ed. 2d 31, 35 (1966).

The fact that the film was commercially shown is not relevant under the circumstances of this case. “It is of course no matter that the dissemination takes place under commercial auspices.” Smith v. California, 361 U. S. 147, 150, 80 S. Ct. 215, 217, 4 L. Ed. 2d 205, 209 (1959).

In Jacobellis v. Ohio, 378 U. S. 184, at 191, 84 S. Ct. 1676, at 1680, 12 L. Ed. 2d 793, at 800 (1964), the Court stated:

* * * If follows that material dealing with sex in a manner that advocates ideas, Kingsley Int’l Pictures Corp. v. Regents, 360 U. S. 684, 79 S. Ct. 1362, 3 L. Ed. 2d 1512, or that has literary or scientific or artistic value or any other form of social importance, may not be branded as obscenity and denied the constitutional protection. Nor may the constitutional status of the material be made to turn on a ‘weighing’ of its social importance against its prurient appeal, for a work cannot be proscribed unless it is ‘utterly’ without social importance, (emphasis added)

Judge Mintz stated in Lordi v. UA New Jersey Theatres, Inc., 108 N. J. Super. 19 (Ch. Div. 1970):

All ideas having even the slightest redeeming social importance— unorthodox ideas, controversial ideas, even ideas hateful to the prevailing climate of opinion — have the protection of the First Amendment unless excludable because they encroach upon the limited area of more important interest, [at 24]

The Court finds that the defendants have established that the film “Man and Wife” is not proscribed by any one of the three criteria that must he found before a work can he held to be obscene. Even if the Court may he wrong as to the dominant theme of the film and as to whether it is patently offensive, it is clear that the film has redeeming social value. Theoretically, at least, the marriage relationship is at the foundation of our form of civilization. One hears condemnation of the mounting divorce rate. The evidence adduced in this case and the works of experts writing about relationships between husband and wife (e. g., James Leslie McCary, Human Sexuality, D. Van Nostrand Company, Inc. 1967) show that a basic cause of discord in marriage that leads to alienation and finally divorce is lack of understanding and knowledge of sex within the marriage. A work that educates about the most basic sexual relationship between husband and wife is not obscene and its dissemination is protected by the Eirst Amendment. “* * * [T]he Constitution protects the right to receive information and ideas.” Stanley v. Georgia, 394 U. S. 557, 564, 89 S. Ct. 1243, 1247, 22 L. Ed. 2d 542, 549 (1969) There will be a judgment declaring that “Man and Wife” is not obscene.


text:
    VINCENT P. KEUPER, MONMOUTH COUNTY PROSECUTOR, PLAINTIFF, v. EDWARD N. WILSON AND ALBERT LARGE, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided August 5, 1970.

      Mr. Elliot L. Katz, Assistant County Prosecutor, for plaintiff.

      Mr. Stanley Yacker and Mr. Robert E. La Mura, for defendants (Mr. Robert E. La Mura, Attorney).
   Lane, J. S. C.

The matter is before the court on defendants' motion to settle the form of the judgment and for an order enjoining plaintiff, Prosecutor of Monmouth County, from proceeding against defendants on any indictment for a violation of N. J. S. A. 2A:115-2 and for an order directing plaintiff to deliver to defendants the motion picture “Man and Wife" previously seized by plaintiff as evidence of an alleged crime.

This action was brought under N. J. S. A. 2A:115-3.5 to enjoin the showing of the motion picture “Man and Wife55 and for an order compelling defendants to surrender to plaintiff any copy of the film in the possession of defendants for destruction in accordance with N. J. S. A. 2A:115-3.7. Defendants filed a counterclaim for a declaration that the motion picture was not obscene. Alter the final hearing the court filed an opinion [111 N. J. Super. 489], holding that plaintiff had failed to sustain the burden of proving the film obscene whereas defendants had sustained their burden of proving the film was not obscene. The opinion concluded, “There will be a judgment declaring that ‘Man and Wife’ is not obscene.”

The statement of events leading to the filing of the complaint is set forth in some detail in the earlier opinion. Defendant Wilson is the owner and operator of a theatre in Keyport. Defendant Large is employed by Wilson as a motion picture projectionist. On June 12, 1970 a warrant for the arrest of Wilson was obtained charging a violation of N. J. S. A. 2A:115-2 based upon Wilson’s exposing to view an “indecent motion film entitled ‘Man and Wife’.” At the time of the arrest the copy of the motion picture being shown was seized. On June 23, 1970 the Monmouth County Grand Jury handed up an indictment charging the defendants with a violation of N. J. S. A. 2A:115-2. The complaint in this action was filed June 24, 1970.

The prosecutor has threatened to move the indictment. The question is whether this Court should restrain the prosecutor from proceeding on the indictment and order the prosecutor to return the seized motion picture to the defendants.

Ordinarily equity will not enjoin criminal proceedings. Eleuteri v. Richman, 47 N. J. Super. 1, 26 (App. Div. 1957), aff’d 26 N. J. 506 (1958), cert. den. 358 U. S. 843, 79 S. Ct. 52, 3 L. Ed. 2d 77 (1958); Moresh v. O’Regan, 122 N. J. Eq. 388 (E. & A. 1937); Dell Publishing Co. v. Beggans, 110 N. J. Eq. 72 (Ch. 1932); 4 Pomeroy’s Equity Jurisprudence (5th ed. 1941), § 1361b, p. 978. An exception to the rule is made where property rights are involved and there is a serious claim that the prosecution is not authorized by law. S. & R. Amusement Corp. v. Quinn, 136 N. J. Eq. 420, 423 (Ch. 1944). Arbitrary acts of officials acting without due process of law will be enjoined; Higgins v. Krogman, 140 N. J. Eq. 518, 520-521 (Ch. 1947), aff’d 142 N. J. Eq. 691, 693 (E. & A. 1948). A prosecutor will be enjoined from violating a person’s property rights acting under color of authority. Bantam Books, Inc. v. Melko, 25 N. J. Super. 292, 298 (Ch. Div. 1953), modified 14 N. J. 524 (1954).

The application now made in this matter does not fall strictly within any of the exceptions referred to.

N. J. S. A. 2A:115-3.5 was adopted as a supplement to Title 2A by L. 1962, c. 166. Section 8 stated that its provisions “are supplemental to other remedies set forth in Title 2A of the New Jersey Statutes.” N. J. S. A. 2A:115-3.10. The Act provides an expeditious civil remedy for the determination of whether “any book, magazine, pamphlet, comic book, story paper, writing, paper, picture drawing, photograph, figure, image or any written or printed matter” being sold or about to be sold is obscene. On a finding of obscenity the sale or distribution of the matter will be enjoined and the matter will be destroyed. N. J. S. A. 2A:115-3.7. Plaintiff has the burden of proving obscenity by a preponderance of the evidence as opposed to the burden of beyond a reasonable doubt in the ease of an indictment under N. J. S. A. 2A:115-2.

N. J. S. A. 2A:115-3.5 does not refer to the right of a defendant to file a counterclaim. Since the action is a civil action, a defendant has such right. R. 4:7-1.

The counterclaim was based upon the Uniform Declaratory Judgments Law, N. J. S. A. 2A:16-50 et seq. In fact defendants here could have filed a complaint under that Law before exhibiting the film. The Uniform Declaratory Judgments Law has been increasingly used in this State to obtain a determination of the legality of a particular course of action rather than pursuing the course of action and risking criminal prosecution. E. g., Sanitary Vendors, Inc. v. Byrne, 40 N. J. 157 (1963); Lucky Calendar Co. v. Cohen, 19 N. J. 399 (1955), 20 N. J. 451 (1956); Thrillo, Inc. v. Scott, 15 N. J. Super. 124 (Cty. Ct. 1951).

It appears from State v. Baird, 50 N. J. 376 (1967) that where there has been a determination under the Uniform Declaratory Judgments Law that a particular course of action would not be a violation of the criminal laws, such determination will be binding upon the prosecutor who was a party to the declaratory judgment action. The court stated:

Preliminarily, we wish to voice our distaste for the unseemly procedural course chosen by the defendant Baird. He could easily have brought a proceeding under the Uniform Declaratory Judgments Act (N. J. S. 2A:16-50 et seq.) under which an appropriate declaration could have been obtained without any criminal action whatever. See Lucky Calendar Co. v. Cohen, 19 N. J. 399 (1955); Sanitary Vendors, Inc. v. Byrne, 40 N. J. 157 (1963); cf. Evers v. Dwyer, 358 U. S. 202, 79 S. Ct. 178, 3 L. Ed. 2d 222 (1958) ; Note, Declaratory Relief in The Criminal Late, 80 Harv. L. Rev. 1490 (1967). In the Lucky Calendar case an advertising company sought and obtained a declaration as to the legality of its proposed sales promotional program ; in his opinion for the Court, Chief Justice Vanderbilt stressed the patent advantages of declaratory testing proceedings over proceedings under the criminal law. 19 N. J., at p. 409. In the Sanitary Vendors case, a company engaged in the automatic vending machine business brought a declaratory judgment proceeding which resulted in a judicial declaration that its proposed mode of selling contraceptives would be unlawful under N. J. S. 2A:170-76. See Annot. 96 A. L. R. 2d 955, 965-967 (1964). [50 N. J. at 378 et seq.]

This result is called for particularly in cases involving First Amendment rights. The Supreme Court of the United States has emphasized the importance of freedom of speech. In Dombrowski v. Pfister, 380 U. S. 479, 486, 85 S. Ct. 1116, 1121, 14 L. Ed. 2d 22, 28 (1965), the Court stated:

* * * Because of the sensitive nature of constitutionally protected expression, we have not required that all of those subject, to over-broad regulations risk prosecution to test their rights. For free expression — of transcendent value to all society, and not merely to those exercising their rights —• might be the loser.” (Emphasis added)

There are numerous eases in which the federal courts have acted to protect a litigant’s civil rights from state criminal proceedings, e. g., Zwickler v. Koota, 389 U. S. 241, 252, 88 S. Ct. 391, 397-398, 19 L. Ed. 2d 444, 452 (1967), where the Court stated:

* * * In such case to force the plaintiff who has commenced a federal action to suffer the delay of state court proceedings might itself effect the impermissible chilling of the very constitutional right he seeks to protect.

In this action the defendants are claiming rights guaranteed to them by the Eirst Amendment to the United States Constitution. It is the obligation of this court to protect such rights. In Robb v. Connolly, 111 U. S. 624, 637, 4 S. Ct. 544, 551, 28 L. Ed. 542, 546 (1883), the Court stated:

* * * Upon the state courts, equally with the courts of the Union, rests the obligation to guard, enforce, and protect every right granted or secured by the constitution of the United States and the laws made in pursuance thereof, whenever those rights are involved in any suit or proceeding before them; for, the judges of the state courts are required to take an oath to support that constitution, and they are bound by it and the laws of the United States made in pursuance thereof, * * *.

The obligation of the prosecutor is not to obtain convictions, rather it is to see that justice is done. State v. Vigliano, 50 N. J. 51, 60-61 (1967); State v. Cook, 43 N. J. 560, 570 (1965). This court which has jurisdiction of the case has made a finding after a full hearing that the motion picture is not obscene. It would be a travesty of justice to allow the prosecutor to proceed to move an indictment charging the defendants with a violation of N. J. S. A. 2A:15-2 based upon the same facts that were before this court. At a trial of the indictment it would be a matter for the court to dismiss the indictment if the Court was satisfied that the material was not obscene. State v. Hudson County News Co., 41 N. J. 247, 256-257 (1963). Although strictly speaking the holding by this court may not be binding on the court hearing the indictment, a contrary holding by that court would subject our judicial system to deserved criticism. This is particularly so in view of the fact that the burden on the prosecutor in this action was far less than his burden would be in a trial on the indictment.

Where there has been a determination that certain matter is not obscene in a proceeding under N. J. S. A. 2A:115-3.5 or in a declaratory judgment action under N. J. S. A. 2A:16-50 et seq., the court will restrain the prosecutor from moving an indictment for a violation of N. J. S. A. 2A:115-2 based upon the same facts. The prosecutor has a right to appeal from such judgment, and until the judgment has been reversed he may not proceed under an indictment charging a violation of N. J. S. A. 2A:115-2. See Zeitlin v. Arnebergh, 59 Cal. 2d 901, 31 Cal. Rptr. 800, 383 P. 2d 152 (Sup. Ct. Cal. 1963), cert. den. 375 U. S. 957, 84 S. Ct. 445, 11 L. Ed,. 2d 315. Annot., “Declaratory Relief — Criminal Statutes” 10 A. L. R. 3d 727 (1966).

The request to enjoin the prosecutor and for a return of the seized film was not contained in the counterclaim. It is authorized at this time by N. J. S. A. 2A:16-60. Notice has been given to the prosecutor, and he has failed to show cause why such further relief as requested should not be granted now.

The Judgment will restrain the prosecutor from proceeding against defendants under any indictment for a violation of N. J. S. A. 2A:115-2 based upon the showing of “Man and Wife” until the holding of this Court that the film is not obscene is reversed. If no appeal is taken from the judgment, the prosecutor is ordered to move under R. 3:25-l within 80 days for a dismissal of the pending indictment. He will return the confiscated film to the defendants a.t the same time. It goes without saying that he will not seek any further indictments against defendants for the showing of the film.

The attorney for defendants will submit a judgment within 10 days in accordance with R. 4:42-1.


author: Colarusso, J. C. C.

text:
    THOMAS PATRICK MINOGUE, PETITIONER-RESPONDENT, v. LAWRENCE PACKAGING SUPPLY CORP., RESPONDENT-APPELLANT.
    Essex County Court Law Division
    Decided July 23, 1970.

      Messrs. Vaccaro and Osborne for respondent-appellant. (Mr. Theodore E. Maloof, appearing.)

      Messrs. Balk, Jacobs, Goldberger and Mandell for petitioner-respondent. (Mr. Jack Mandell, appearing.)
   Colarusso, J. C. C.

This is an appeal pursuant to R. 4:74-1 by Lawrence Packaging Supply Corp. (Lawrence). Judgment was entered by the Workmen’s Compensation Division in favor of petitioner, Thomas Minogue for 100% of his right hand, amounting to $9,200, plus 12^% permanent partial disability, psychiatric in nature, amounting to $2,750.

Lawrence appeals from this judgment, contending that (1) the assessed permanent disability bore no reasonable relationship to petitioner’s injury, and (2) the award failed to credit it for prior compensation awarded petitioner for the amputation of the first joint of the index finger on his right hand.

Petitioner, an employee of Lawrence, was injured in the course of his employment on May 17, 1967, when his right hand accidentally slipped off his machine and was caught between two rollers.

The Court then reviewed the evidence and concluded that the petitioner suffered 100% loss of the right hand and 12J^% of permanent partial disability.

The issue to be determined by the court is whether credit for the previous compensation paid to the petitioner for the amputation of part of the index finger should be allowed under N. J. S. A. 34:15-12(d).

N. J. S. A. 34:15-12(d) provides as follows:

If previous loss of function to the body, head, a member or an organ, due to any previous compensable accident or accidents, is established by competent evidence, and subsequently an injury arising out of and in the course of an employment occurs to that part of the body, head, member or organ, where there was a previous loss, then and in such case, the employer or his insurance carrier at the time of the- subsequent injury shall not be liable for any loss for which compensation has previously been paid or awarded. In either event, credit shall be given the employer or his insurance carrier to the extent of the previous loss for which compensation has been paid.

No case in this jurisdiction was found by the court dealing directly with the interpretation of the Statute as to the credit to be given in a situation similar to the present.

Two courts were asked to interpret N. J. S. A. 34:15-12 (d) in situations easily distinguishable from the instant case. The case of Nelson v. Meeker Foundry Co., 30 N. J. 139 (1959) where a workman lost the thumb and first and second finger of his left hand in 1931 and then lost liis fourth, or little finger of the same hand in 1956. The Supreme Court held the workman could recover 100% disability of the hand less the number of weeks of compensation paid to him for the 1931 loss of his digits. This case is clearly distinguished from the situation presented before us in this case. In Nelson, the two injuries together caused the loss of the workman’s hand. In the instant situation the prior amputation did not, when coupled with the present injury cause the loss of use of the hand. The present injury itself caused the loss of use of the petitioner’s right hand.

The Appellate Division in Caputo v. Kero, 84 N. J. Super. 279 (App. Div. 1964), which case is also distinguishable from the instant fact situation, refused a credit for a prior injury. The court there found that a prior compensable wrist fracture was not creditable to a later injury involving the workman’s loss of fingers on the same hand under N. J. S. A. 34:15-12(d).

Since no New Jersey authority could be found dealing with the instant factual situation, the court looked for persuasive authority from a neighboring jurisdiction with a similar statute to N. J. S. A. 34:15-12(d).

The court found a similar statute in Illinois Ill. Rev. Stat., 1961, c. 48, par. 138.8(e) which in essence, states

In computing the compensation to be paid to any employee who, before the accident for which he claims compensation, had before sustained an injury resulting in a loss by amputation or partial loss by amputation of any member, including hand, arm, thumb, finger ® * * such loss or partial loss of any such member ® * * shall be deducted from any award for the subsequent injury. For the permanent loss of use of any such member for which compensation has been paid, then, such loss shall be taken into consideration and deducted from any award for the subsequent injury.

The Illinois Supreme Court in applying this statute in American Steel and Wire v. Industrial Commission, 35 Ill. 2d 414, 220 N. E. 2d 412 (1968) held:

In the event there is a loss or partial loss of specified members by amputation, then such loss shall be deducted from an award made for a subsequent injury.

This court realizes that the Illinois statute is far from identical to our N. J. S. A. 34:15-12(d) but notes that the mode, scheme and intent of the two statutes are the same, that is, to credit a company for a prior amputation or loss of function of a member of the person’s body which is later again injured.

Therefore, it is clear to the court that the intent of our Legislature in passing N. J. S. A. 34:15-12(d) was to prevent the double recovery to the same member of the body such as, an arm, hand or leg where a previous partial recovery for some injury to some part of said member was previously paid as was done in the ease of Heidel v. Wallace & Tiernan, Inc., 37 N. J. Super. 522 (Cty. Ct. 1953), approved on opinion below, 21 N. J. 335 (1956), decided before passage of N. J. S. A. 34:15-12(d).

In applying N. J. S. A. 34:15-12(d) to the instant fact pattern, the court finds that this statute requires that a credit be given against the present award for the prior award of 40% of the right first finger which was previously paid to the petitioner.

The judgment entered in the Division of Workmen’s Compensation is modified in accordance with this opinion.


author: Hartman, J. C. C.

text:
    ETHEL E. NEWGARD, PLAINTIFF, v. JOHN J. NEWGARD, DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided July 31, 1970.

      Messrs. Meth & Wood, attorneys for plaintiff (Mr. Theodore Sager Meth, appearing).

      Messrs. Riker, Danzig, Scherer and Brown, attorneys for defendant (Mr. Everett M. Scherer, appearing).
   Hartman, J. C. C.

(temporarily assigned). The issue of alimony here is a novel one.

Plaintiff is the former wife of defendant. She secured a divorce from him in 1955 in the State of Pennsylvania, the matrimonial domicile of the parties at that time. On February 4, 1969 plaintiff filed an action in the Chancery Division against defendant, inappropriately styled as a separate maintenance action, in which she sought support and maintenance for herself and the two minor children of their marriage. Both parties were then residents of New Jersey.

As a result of this action the parties arrived at agreed provisions for the support of the children, including the payment of rent for plaintiff’s apartment while the children or either of them lived with their mother. These provisions were set forth at length in a “consent order” — it should have been a judgment — entered on May 6, 1969. Paragraph 7 of the order recites: “Plaintiff disclaims any rights which she personally may have for alimony hero.”

Plaintiff now moves at the foot of the judgment for a modification to the end that the court award her alimony based on her asserted needs and changed circumstances.

It is well settled in Pennsylvania that a valid divorce decree terminates the duty of a husband to support his wife. Commonwealth v. Petrosky, 1951, 168 Pa. Super. 232, 77 A. 2d 647; Commonwealth ex rel. McCormack v. McCormack, 1949, 164 Pa. Super. 553, 67 A. 2d 603; Commonwealth ex rel. Parker v. Parker, 1915, 59 Pa. Super. 74. [Commonwealth ex rel. Lorusso v. Lorusso, 189 Pa. Super. 403, 150 A. 2d 370, p. 372 (Super. Ct. 1959)].

The Pennsylvania statutes on divorce are silent as to alimony (except in cases dealing with insane spouses, 23 P. S., § 45); Pennsylvania decisional law has interpreted the statutory silence as denying alimony after divorce. Hence, it is clear that if the parties to this action had remained residents of Pennsylvania, plaintiff’s motion for alimony would have been denied. Under the law of that state a husband’s obligation to support his wife may be enforced only while they remain husband and wife. After divorce the husband’s obligation to support her ceases; his duty to support his children is, of course, not affected by the event of a divorce.

The wife contends that New Jersey permits alimony to a divorced wife whether the divorce is obtained by her in this State “or elsewhere,” citing as her authority N. J. S. A. 2A:34—23. In other words, despite Pennsylvania’s prohibition of alimony following a divorce, the public policy of New Jersey, by reason of our statute, permits it. This contention goes contra the duty imposed upon states by the Eull Faith and Credit Clause of the Federal Constitution to respect the judgments and laws of our sister states. Art. IV § 1. This court is bound to give that respect and to grant no more or no less relief than would be afforded in the rendering state. Roskein v. Roskein, 25 N. J. Super. 415 (Ch. Div. 1953). What the Pennsylvania law does not permit, New Jersey will not grant.

In Lorusso, supra, the Pennsylvania wife had secured a support order against her husband. Thereafter he established his residence in Nevada and eventually obtained an ex parte divorce in that state. He followed this with a move in the Pennsylvania proceedings to vacate the previously entered support order. After a plenary hearing Pennsylvania found that he had in fact established a bona fide residence in Nevada, the Nevada decree was entitled to full faith and credit in Pennsylvania, and therefore he was entitled to be relieved of any further obligation to support his former wife from the date of entry of the divorce decree in Nevada — this for the reason that Pennsylvania’s public policy does not permit alimony following divorce.

The Full Faith and Credit Clause affords protection to vested rights of parties in situations where alimony provisions are not modifiable by the laws of the states in which the original provisions were made. The same rights are enforceable in other states. Sistare v. Sistare, 218 U. S. 1, 30 S. Ct. 682, 54 L. Ed. 905, and Roskein, supra. There should be and I find no basic legal distinction between inflexibly fixed alimony provisions and judgments which by law of the rendering state do not permit any alimony; full faith and credit is commanded for both.

The Full Faith and Credit Clause orders “submission by one State even to hostile policies reflected in the judgment of another State, because the practical operation of the federal system, which the Constitution designed, demanded, it.” Estin v. Estin, 334 U. S. 541, 68 S. Ct. 1213, 1217, 92 L. Ed. 1561 (1948).

The wife further contends that under the “divisible divorce” doctrine she is entitled to alimony, relying on Bing v. Bing, 86 N. J. Super. 246 (J. & D. R. CT. 1965), and N. J. S. A. 2A:34-24.1. She is in error. This statute was passed as a supplement to our separate maintenance act. It was intended to provide a remedy to abandoned wives despite the securing of ex parte divorces by absconding husbands. This supplemental act was passed in 1955 following holdings by the U. S. Supreme Court in 1948 in the well-known cases of Estin v. Estin, supra, and Kreiger v. Kreiger, 334 U. S. 555, 68 S. Ct. 1221, 92 L. ed. 1572, (1948)

Estin and Kreiger applied in divorce cases a previously stated divisible divorce theory that an ex parte divorce could effectively terminate the marital status between parties but would not affect property rights between them nor matters of support. Specifically, these cases held that a wife who had secured a separation decree against her husband, with provisions for her support, was legally entitled to retain the benefits of her support provisions despite the fact that he later managed to secure an ex parte divorce against her in another state. In short, a judicial separation decree — or, as in New Jersey, a separate maintenance judgment — survives a later ex parte divorce secured by the husband. What Estin and Kreiger did not encompass N. J. S. A. 2A:34-24.1 supplied. This supplement not only protects a wife’s separate maintenance judgment but, as well, her right to pursue a proper claim for separate maintenance against an absconding husband after he has managed an ex parte divorce in another state. Vanderbilt v. Vanderbilt, 354 U. S. 416, 77 S. Ct. 1360, 1 L. Ed. 2d 1456 (1956); Armstrong v. Armstrong, 350 U. S. 568, 76 S. Ct. 629, 100 L. Ed. 705 (1957).

In Bing, supra, the Bergen County Juvenile and Domestic Eelations Court applied the sense of N. J. S. A. 2A:34-24.1 in an action brought under the Uniform Eeciprocal Enforcement of Support Act, N. J. S. A. 2A:A-30.1 et seq., following an ex parte South Carolina divorce. This contention o£ plaintiff is without merit. Whether the Juvenile and Domestic Relations Court has jurisdiction under N. J. S. A. 2A:34-24.1 is of no moment here.

Plaintiff’s third contention is that a change in the wife’s circumstances requires a modification. This contention is frivolous; there is nothing to modify. Where a wife is legally entitled to nothing, equitable considerations, such as a person’s needs, cannot create additional rights where primary rights did not exist. Suppose a husband divorced his wife in hi ew Jersey for her matrimonial offense; would the fact that she later found herself in dire circumstances create a new obligation against her former husband to support her, when any obligations for her support had already legally ceased with the entry of the judgment of divorce in his favor ? Obviously, the answer is in the negative. The same answer governs a case where a divorced wife remarries, then divorces husband II and comes back to court seeking alimonjr or a modification of the prior alimony award simply because she is without funds.

The remaining part of plaintiff’s motion seeks a modification of the support provisions for the minor children. I have carefully reviewed the affidavits submitted by both sides. I am satisfied by defendant’s uncontradicted affidavit that there is no warrant for any change from the provisions of the 1959 agreement between the parties with regard to the children. Her motion is denied.

Plaintiff’s motion for alimony is also denied. Ho counsel fees nor costs are awarded.