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Scrudato v. Mascot Savings and Loan Association of Newark

Decided: May 22, 1958.


Goldmann, Freund and Conford. The opinion of the court was delivered by Goldmann, S.j.a.d.


[50 NJSuper Page 266] Mascot Savings and Loan Association of Newark ("Mascot") brings this appeal under

R.R. 4:88 from a final determination and order of the Commissioner of Banking and Insurance made pursuant to N.J.S.A. 17:12 A -100, granting appellant Scrudato, as a member and director of Mascot, the right to make a list of the names and addresses of the association members and to examine its books, records, minutes and proxies. Mascot also appeals from the Commissioner's denial of its application for a rehearing.

A detailed recital of the events leading up to the proceedings before the Commissioner is unnecessary in view of the issues projected on this appeal and discussed below. Suffice to say that differences had developed among the guiding spirits of Mascot, with director Scrudato and director and association counsel Albano heading up the minority. At the annual meeting in January 1957 the majority group, apparently led by the association secretary, was victorious in a proxy contest. The minority's complaints stem essentially from the use of the proxies at the annual meeting and thereafter, and from the conduct of the association's business.

On April 22, 1957 Scrudato filed a request with the association pursuant to N.J.S.A. 17:12 A -100(1), seeking information under 22 headings as to membership, proxies, voting of proxies, minutes, etc. Mascot answered under date of April 30, 1957, making direct reply to all but five of the inquiries and, as to the latter, advising Scrudato that he could inspect the membership lists, proxy lists and other records desired at the offices of the association, by appointment with the secretary. Scrudato considered the answers inadequate and thereupon applied to the Commissioner of Banking and Insurance for an order requiring the association to supply the desired information, as permitted by the statute which reads, in part:

"If the association shall fail to supply the information applied for within ten days after receipt by it of said application, such member may, within an additional ten-day period, apply to the commissioner for an order requiring the association to do so." (N.J.S.A. 17:12 A -100(2))

Scrudato thus had 20 days from the time he filed his request for information with Mascot, to make his application to the Commissioner. That period elapsed on May 12, 1957, a Sunday, and he therefore had until the next day, May 13. His application was by letter, postmarked at Newark, N.J., May 15, and received by the Commissioner at Trenton on May 16, 1957. Even if Scrudato be given the benefit of the mailing date, his application was already two days late.

At the opening of the hearing on June 4, 1957 Mascot moved to dismiss the proceedings on the ground that Scrudato's application was out of time. After extended argument, the Acting Commissioner reserved decision and proceeded with the plenary hearing, which lasted three days. The determination and order came down on September 6, 1957. In holding that Mascot's objection to the late filing of the application was valid, the Acting Commissioner said the statute (N.J.S.A. 17:12 A -100) must be strictly construed and that the application would "under ordinary circumstances" be dismissed. Nevertheless, he proceeded to dispose of the application on the merits, "as though no statutory defect exists," for three reasons: (1) it would not be too difficult for Scrudato to rectify the statutory error by filing a new request for information with Mascot and then (presumably upon its failure to respond) making a new application to the Commissioner; (2) the time already spent on the hearing; and (3) the application had been made by a member-director. He then determined that irrespective of Scrudato's right as a member to the information requested, he, as well as Albano, had that right because of their status as directors of Mascot. The Acting Commissioner deemed it unnecessary to pass on the question of whether the information was being sought in good faith, because of the status of both men as directors of the association. (Although the Acting Commissioner spoke of Albano's rights, it must be remembered that only Scrudato had applied for the order compelling information.) The order under appeal was then entered. Mascot at once requested

a rehearing because Scrudato had in the meantime been removed as director on August 6, 1957. The request was denied.

Mascot contends that the Commissioner had no discretion to hear the application in view of the expiration of the statutory time limit, argued to be mandatory, and that the reasons he advanced to justify his action are specious. Scrudato claims that matters of procedure are, under the statute, left to the discretion of the Commissioner, and the reasons he gave justified his dealing with the merits. We are of the opinion that the determination and order must be reversed and Scrudato's application dismissed.

There can be no dispute that the application was filed beyond the time fixed by the statute, N.J.S.A. 17:12 A -100. Where a statute sets up precise time limits within which an aggrieved party may seek recourse to administrative adjudication, those limits have been held mandatory and not subject to relaxation. The agency is without power to waive them and proceed to hearing and determination notwithstanding non-compliance. Although there is no case dealing with a proceeding such as is here involved, other cases from the field of general administrative law amply support the stated principle. Borough of Park Ridge v. Salimone , 21 N.J. 28, 47 (1956), affirming 36 N.J. Super. 485 (App. Div. 1955), (R.S. 11:15-4, appeal to Civil Service Commission by removed employee must be within ten days); Kaske v. State , 34 N.J. Super. 222, 226 (App. Div. 1955) (N.J.S.A. 43:21-6(c) and (e), unemployment compensation appeal from Appeal Tribunal's decision, or action taken on Board of Review's own motion, limited to within ten days); Borgia v. Board of Review , 21 N.J. Super. 462, 467 (App. Div. 1952) (N.J.S.A. 43:21-6(b)(1)(C), seven-day limit to appeal ...

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