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John S. Westervelt''s Sons v. Regency Inc.

Decided: January 9, 1950.

JOHN S. WESTERVELT'S SONS, A BODY CORPORATE, PLAINTIFF-APPELLANT,
v.
REGENCY, INC., DEFENDANT, AND JEAN G. L. CASSEL VAN DOORN AND MARIJ V. CASSEL VAN DOORN, DEFENDANTS-RESPONDENTS, AND WILLIAM HENIG, AS TRUSTEE IN BANKRUPTCY OF REGENCY, INC., BANKRUPT, DEFENDANT-APPELLANT



On appeal from the Appellate Division of the Superior Court, whose opinion per curiam is reported in 3 N.J. Super. 173.

For affirmance -- Chief Justice Vanderbilt, and Justices Case, Heher, Oliphant, Wachenfeld, Burling and Ackerson. For reversal -- None. The opinion of the court was delivered by Heher. J.

Heher

This cause was certified for appeal to the Appellate Division of the Superior Court on the petition of the plaintiff and the defendant Trustee in Bankruptcy of Regency, Inc.

On November 16, 1948, there was summary judgment for the defendant-appellant Trustee in Bankruptcy in the Chancery Division of the Superior Court vacating a conveyance of lands made by the bankrupt Regency, Inc., to the defendant-respondent Jean G. L. Cassel van Doorn, except as to a portion of the lands conveyed by the grantee to a bona fide purchaser for value without notice, as made for a past consideration "in contemplation of insolvency" to one "who was fully informed as to the condition of the company," and awarding $25,000 to the Trustee against the defendant-respondent Jean G. L. Cassel van Doorn, representing the consideration paid to van Doorn by the third party purchaser of the lands so sold by him. 1 N.J. Super. 466 (1948).

The suit was brought to enforce a judgment of $23,103.90 and costs recovered by the plaintiff-appellant against the now bankrupt grantor of the lands There were two additional creditors whose claims aggregated in excess of $1,900. A month after the commencement of the suit, the corporate judgment debtor was on its own petition adjudged a bankrupt by the Federal District Court, and Henig was elected trustee. The trustee was thereupon made a party defendant to the suit. The judgment was awarded to the trustee "as the representative of all of the creditors" of the bankrupt. It disallowed claims for counsel fees interposed by the plaintiff and the trustee as not within the purview of Rule 3:54-7 of this Court barring counsel fees except, inter alia, "(d) as provided by these rules or by law with respect to any action, whether or not there is a fund in court;" and this ruling is assigned for error. Plaintiff prayed an allowance of $5,000, and the trustee, $1,500.

The insistence is (1) that R.S. 2:29-131, 132, granting a discretionary power to allow counsel fees, are still in full force and effect and are comprehended in the phrase "by law" of

subdivision (d) of Rule 3:54-7; and (2) that if the rule of court be deemed a bar to the award of counsel fees under R.S. 2:29-131, 132, it is violative of Article VI, section II, paragraph 3 of the Constitution of 1947. It is pointed out that the suit was commenced prior to the effective date of the Judicial Article of the new Constitution; and that Judge Grimshaw did not disallow counsel fees in the exercise of the asserted statutory discretion, but in obedience to what he conceived to be the peremptory command of the rule of court.

Appellant invokes Article XI, section I, paragraph 3 of the Constitution of 1947, providing, inter alia, that "All law, statutory and otherwise, * * * in force" at the time the Constitution or any article thereof became effective "shall remain in full force until they expire or are superseded, altered or repealed by this Constitution or otherwise;" Article XI, section I, paragraph 4, providing that "Except as otherwise provided" by the Constitution, all "actions * * * shall continue unaffected;" Article XI, section IV, paragraph 3, providing that the "jurisdiction, functions, powers and duties" of the superseded courts "shall be transferred to and divided between the new Supreme Court and the Superior Court" according as jurisdiction is vested in them by the Constitution; and Article XI, section IV, paragraph 10, providing that "all the functions, powers and duties conferred by statute, rules or otherwise upon the Chancellor, the Ordinary, and the Justices and Judges" of the courts abolished by the Constitution, "to the extent that such functions, powers and duties are not inconsistent" with the Constitution, "shall be transferred to and may be exercised by Judges of the Superior Court until otherwise provided by law or rules of the new Supreme Court * * *." The argument is that, unless there be statutory provision otherwise, the power of the Chancellor under the old system to award counsel fees, as provided by R.S. 2:29-131, now resides in the Superior Court to which the cause has been transferred. It is said that there is no statutory provision contra. Indeed, chapters 367 and 375 of the Session Laws of 1948 (P.L., pp. 1500,

1540) are read as conferring upon the Superior Court in this cause all the powers in this regard possessed by the court from which the cause was transferred before the adoption of the new Constitution and the "additional powers" vested in it by the new Constitution and continuing the cited statutes in full force and effect. In a word, the contention is that Rule 3:54-7 did not work a repealer of R.S. 2:29-131. It is also urged that a rule of court should be construed "in harmony with a statute, if possible," and the phrase "by law" in subdivision (d) of the rule signifies a purpose to save the operative force of R.S. 2:29-131, certainly so when considered in the light of the amendment to subdivision (d) of the rule made by the Court January 21, 1949, adding this clause: "but the authority heretofore vested in the Court of Chancery for the granting of counsel fees in causes generally, is hereby superseded." Reliance is placed upon the principle that implied repealers are not favored in the law.

The rule as originally written is not ambiguous when considered as a whole. It was adopted in the exercise of the rule-making power relating to practice and procedure conferred upon the Court by Article VI, section II, paragraph 3 of the Constitution of 1947. It was plainly designed to be self-contained and exclusive. The cited amendment of the rule makes clear the purpose to supersede in this regard the powers of the old Court of Chancery, not the statutory authority lodged in the Chancery Division of the Superior Court by force of subdivision (d) of the rule as appellant would construe it. The amendment was but a clarification of the original purpose, not an amendment of that purpose. It is merely declaratory of the true meaning of the rule as it was. The construction of the phrase "by law" suggested by appellant would radically modify the provisions of subdivisions (a), (b) and (c) of the rule; and there is no good reason for supposing ...


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