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Reconstruction Finance Corp. v. Oates

Decided: January 4, 1950.

RECONSTRUCTION FINANCE CORPORATION, A CORPORATION OF THE UNITED STATES, PLAINTIFF,
v.
BERNARD OATES, ETHEL C. OATES, BERNCLIFF REALTY, INC., A NEW JERSEY CORPORATION, AND LOIS HILL, DEFENDANTS



Haneman, J.s.c.

Haneman

Of present moment is the determination of a two-fold motion by the plaintiff for a summary judgment against the defendants on their respective counterclaims, viz. , the first count filed in behalf of the Berncliff Realty, Inc., and the second count by Bernard Oates and Ethel C. Oates.

As to the corporate defendant, the plaintiff advances the following grounds:

"1. That said counterclaim is insufficient at law.

"2. That said counterclaim fails to state a claim upon which relief can be granted against plaintiff.

"3. That the allegations of said counterclaim are indefinite, uncertain and speculative."

It should be observed that this defendant demands alternatively (sic) a judgment against the plaintiff in the sum of $3,200 (allegedly representing its investment in the premises in question) if the plaintiff prevails in nullifying the conveyance under attack. It is not made evident upon what theory an affirmative judgment may be entered against the plaintiff which is the assignee (by operation of law) of the Smaller War Plants Corporation (paragraph 19 of the complaint) since, according to the complaint "the plaintiff herein was vested with all the assets of Smaller War Plants Corporation, including the obligations to it of the defendants herein." It may be that the Executive Order abolishing the Smaller War Plants Corporation and vesting its assets in the plaintiff, provides for the assumption by the plaintiff of contingent

liabilities, but as to that, we are pointed to no such provision. It is elementary that an "assignee does not thereby, without more, assume the liabilities of the assignor." Falkenstern v. Herman Kussy Co. , 25 N.J. Misc. 447, 448; affirmed, 137 N.J. Law 200, 59 A.2d 372.

Moreover, the allegations of the seventh separate defense, if sustained, would, as a matter of equity, justify an award by the court of a judgment of the same tenor as that sought by the counterclaim. See Rule 3:54-4. Thus, no useful purpose is manifest in permitting the first count of the counterclaim to stand. The motion to strike it is accordingly granted, reserving to that defendant the right to establish said separate defense.

The counterclaim of the individual defendants (Oates) is challenged on these grounds:

"1. Counterclaimants, Bernard Oates and Ethel C. Oates, are now barred by estoppel and waiver from setting up the claim set forth in said second count of the counterclaim because it arose out of the same transaction which constituted the subject matter of the suit in which plaintiff, Reconstruction Finance Corporation, recovered judgment ...


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