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Balip Automotive Repairs Inc. v. Schroeder

Decided: June 12, 1950.


McGeehan, Colie and Eastwood. The opinion of the court was delivered by Eastwood, J.A.D.


[8 NJSuper Page 239] Defendant, Atlantic Casualty Insurance Company (hereinafter referred to as the insurance company),

appeals from an order of the Superior Court, Law Division, denying its application under R. 3:60-2 (3) for relief from the judgment entered against it and for a new trial. Defendant also appeals from the judgment returned against it on the ground of alleged trial errors and that the judgment is against the weight of the evidence. We think it necessary to discuss and decide only the appeal from the order denying a new trial.

Plaintiff instituted its action against defendants, John Schroeder, William Leonard and the insurance company, to recover the cost of repairs made by plaintiff to an automobile owned by the defendant, John Schroeder, which repairs plaintiff alleged the defendant insurance company, acting through its agent and employee, William Leonard, had authorized and agreed to pay for. Subsequently, the action was discontinued as to defendant Schroeder and at the trial he testified for plaintiff. The jury returned a verdict of no cause of action in favor of defendant, William Leonard, and a verdict in the sum of $934.49 against the defendant insurance company. Judgment was entered April 4, 1949.

On April 8, 1949, the insurance company sought an order directing plaintiff to show cause why it should not have relief from the judgment and a new trial on the ground of fraud, misrepresentation and other misconduct on the part of the plaintiff under Rule 3:60-2 (3) and mistake, inadvertence, surprise and excusable neglect on the part of the insurance company under Rule 3:60-2 (1). Under authority of the order granted by the court, depositions were taken and books and records were examined. At the trial, plaintiff's president, John Lipnicki, testified that the plaintiff company had repaired 10 to 15 automobiles for the defendant insurance company between July and September, 1946, at Leonard's request, and that the defendant company had paid for each by check. The defendant, at the time, requested the court to direct plaintiff's president to produce his company records to substantiate this testimony. The witness stated he could not produce the records in less than three hours'

time, and it appearing that the trial would be concluded within a comparatively short time thereafter, and without further objection by the insurance company, the trial proceeded without the introduction of the records into evidence. The depositions disclosed that plaintiff's records showed no reference to the alleged repair jobs and that the sole payment made by it to plaintiff was a single draft in the amount of $21 representing payment for seven inspections of damaged automobiles made by plaintiff. The testimony given by Lipnicki at the time of the taking of the depositions corroborated the testimony of the insurance company's witnesses at the trial, viz.: that it had never paid plaintiff for any repair work, but only the sum of $21 for the seven inspections. At the trial, Lipnicki insisted that the alleged prior repair work done by his company for the insurance company at the direction of the insurance company's employee, Leonard, was within his own knowledge, whereas when the depositions were taken, he admitted his testimony at the trial was not based upon his personal knowledge of the challenged evidence, but upon information given to him by his accountant, Baker, who before the trial, had left for parts unknown and was not available as a witness. In fact, at the taking of the depositions, Lipnicki admitted that his prior testimony regarding the aforesaid repairs and his company's records respecting same was "wrong."

The trial court, in reviewing the depositions, and considering the arguments of counsel, stated, inter alia:

"The case was tried before the author of this opinion. The charge instructed the jury that they must determine the issues of Leonard's agency and scope of authority solely on the evidence as to the repairs of the 10 to 15 vehicles and without reference to the statements out of court as to the taxicab repairs imputed to Leonard and that such statements were binding on the insurance company as admissions only if the jury concluded from the testimony as to the 10 to 15 vehicles that Leonard had authority to order vehicles to be repaired and to obligate his employer to pay for the repairs. Compare Van Genderen v. Paterson Wimsett Thrift Co., supra."

"* * * It is clear that but for such testimony defendant would have prevailed on one of its motions because without that testimony, plaintiff's proofs were barren of legal evidence to support a verdict against the insurance company. * * *"

"Defendant's burden on this motion is to show by clear, convincing and satisfactory evidence, not simply that the testimony of plaintiff's president was false, but (1) that it was wilfully and purposely falsely given, (2) that it was material to the issue being tried, and was not merely cumulative but probably controlled the result, and (3) that the fact of its falsity could not have been discovered by reasonable diligence in time to offset it at the trial or that for other good reason the failure to use diligence is under all the circumstances not a bar to relief. Koop v. Acken , 90 Neb. 77, 132 N.W. 721 (1911); McDougal v. Walling , 21 Wash. 478, 58 P. 699 (1899).

"Element (2) is obviously established. The challenged evidence controlled the result because without that evidence the case could not have been submitted to the jury.

"Defendant has not sustained its burden, however, as to elements (1) and (3). * * *"

"There is no question that neither such records as the witness finally produced nor the insurance company records support his testimony at the trial; on the contrary, they tend to show its falsity. * * *"

The trial court stated that the case of U.S. v. Throckmorton , 98 U.S. 61, 25 L. Ed. 93 (1878), is recognized as the leading ...

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