On appeal from the New Jersey Supreme Court, whose opinion is reported in 113 N.J.L. 81.
For the plaintiff-respondent, Simon Englander.
For the defendants-appellants, Samuel B. Krasny.
The opinion of the court was delivered by
CASE, J. Defendants' appeal brings up a judgment of the Supreme Court affirming a judgment of $336.38 for plaintiff entered in the District Court of the Second Judicial District of Essex county.
First, concerning the jurisdiction of the District Court to entertain the action. Section 30 of the District Court act (Pamph. L. 1898, ch. 228, as amended, Pamph. L. 1910, ch. 134; 2 Comp. Stat., p. 1962), confers jurisdiction in so far as this character of action is concerned where "the debt, balance * * * or other matter in dispute does not exceed, exclusive of costs, the sum or value of five hundred dollars." The state of demand contained five counts, all, apparently, based on services alleged to have been rendered by plaintiff as an expert accountant. The aggregate demands under the first three counts were for $525 and interest. The fourth count made the same monetary demand. A motion to dismiss for lack of jurisdiction, made before either specification of defenses or counter-claim was filed, was denied because the court found that "the excess over $500 was expressly waived." There was nothing at that time in the record to sustain a waiver as to the first four counts except the concluding paragraph of the state of demand which applied specifically to all the counts and was as follows: "Plaintiff demands * * * $500 with interest and costs of suit to be taxed." Notwithstanding that clause, the demand of counts 1 to 4 inclusive was still excessive because the inclusion of interest necessarily extended the claim beyond the $500 jurisdiction. Van Giesen v. Van Houten, 5 N.J.L. 822; see, also, Review of Decisions on similar statutes, 77 A.L.R. 991. We think that the motion should have been granted.
But if in some unnoted way defendants lost the right of appeal on that error, we come to the court's denial of the motion when renewed after the defendants had filed their specification of defenses and their counter-claim and after, as we judge from the state of case, plaintiff had conceded the counter-claim, credited the amount thereof and asked judgment for the balance left on his own claim after this deduction. Then the balance in dispute, being that for which judgment was later given, was within the District Court jurisdiction; and it is the balance in dispute, exclusive of the costs, that is the test of jurisdiction. Section 33, District Court act, supra. Bowler v. Osborne, 75 N.J.L. 903. We find no error in that ruling.
Our fundamental divergence from the decisions below turns on the legal effect to be given the specification of defenses which was filed by the defendants on the demand of the plaintiff under section 2, chapter 281 (Pamph. L. 1910), given the arbitrary section marking of 61b in the District Court legislation (2 Comp. Stat., p. 1971), which provides:
"The plaintiff in actions on contract wherein the matter in dispute as shown by the summons is over the sum of three hundred dollars, may likewise add to or endorse upon said state of demand, a notice to the defendant that the plaintiff demands that the defendant shall file a written specification of defenses intended to be made to said action on or before the time specified for appearance in the process or summons, or on the return of the warrant, or at the time of appearance specified in the recognizance, and thereupon the defendant shall specify such defenses in writing and file the same and serve a copy thereof upon the plaintiff or his attorney within such time, and shall at the trial be confined to the defenses so specified; and in case the defendant fails to comply with such demand and serve such copy within such time, he shall be barred from making any defense to said action; but the court, at or before the trial of the action, upon terms, may permit such defendant to file and serve, or amend such specifications."
The specification did not traverse the allegations of the
state of demand. Defendants further filed a counter-claim grounding in alleged negligence by the plaintiff in the rendering of accounting services with respect to defendants' 1926 income tax return. There is no disclosed identity between that item and the subject-matter of plaintiff's demand. The matter came on for trial, and the court thereupon, without proof, on plaintiff's motion for judgment on the pleadings, directed a verdict for the plaintiff in the amount sued for, less the counter-claim. That was after defendants, apparently sensing the direction of the court's mind, had sought and been denied the privilege of amending the specification of defenses to include a specific denial of the amount sued for. Justification, if it exists, for the direction of verdict ...