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UNITED STATES STEEL CORP. v. COMMERCIAL CONTR. COR

November 11, 1958

UNITED STATES STEEL CORPORATION, a New Jersey corporation, Plaintiff,
v.
COMMERCIAL CONTRACTING CORPORATION, a foreign corporation, Defendant



The opinion of the court was delivered by: FORMAN

The plaintiff, United States Steel Corporation (hereinafter called Steel), a New Jersey corporation, on August 19, 1957, engaged in a contract with the defendant, Commercial Contracting Corporation (hereinafter called Commercial), a corporation of Michigan, not licensed to do business in New Jersey, for construction work on the Sheet and Tin Division of its Fairless Works at Fairless Hills, Pennsylvania, for which the plaintiff agreed to pay $ 418,000. The contract has been completed and plaintiff concedes that it has not paid a balance of $ 20,900 due from it to the defendant.

In February 1958, Joseph Rommell, an employee of Commercial, instituted a suit against Steel alone in the Superior Court of New Jersey, alleging that he sustained personal injuries during the course of work under the contract between Steel and Commercial due to negligence of the former.

 On or about September 22, 1958, plaintiff Steel instituted this suit against Commercial in the Superior Court of New Jersey, Law Division, Mercer County. Its complaint, verified by the affidavit of its Vice President Edward C. Myers, alleged in substance that the injuries of which Joseph Rommell complained in his suit against Steel were caused solely by the negligence of Commercial or by Rommell himself, and that it had neither caused nor contributed to them. It further charged that its contract with Commercial required the latter to assume in its behalf the defense of the suit by Rommell, and to indemnify it pursuant to Paragraphs 6, 13, 15 and 16, which are set forth below. *fn1" It also charged that in the event that there was a determination of negligence in the Rommell suit, imputed or attributable to Steel by reason of the contract between it and Commercial or otherwise then the plaintiff would be entitled to indemnity and recovery against the defendant.

 By way of relief it demanded damages in whatever sum Steel may be required to pay in the Rommell action with interest, costs and attorneys' fees; a declaration of the rights and obligations of the parties to the contract; a declaration of its rights to withhold the $ 20,900 conceded to be due from it to Commercial to satisfy any judgment against it by Rommell and a declaration of its right to withhold from the said moneys sufficient to satisfy its costs and expenses, including lawyers' fees in defending the Rommell suit.

 A copy of the contract was annexed to the complaint and affidavit and on plaintiff's application a writ of attachment was ordered by Judge Arthur S. Lane to issue out of the Superior Court of New Jersey against the rights and credits of Commercial in the sum of $ 20,900, pursuant to which a levy was made on the money by Steel in its own hands. Another order was then made by Judge Lane providing for personal service upon Commercial outside of New Jersey.

 On October 10, 1958, Commercial removed the suit from the Superior Court of New Jersey to this court on the ground of diversity.

 Later Commercial gave Steel notice of a motion for an order quashing and dismissing the writ of attachment issued in the cause and for dismissal of the levy and of the cause upon the ground that the Superior Court was without jurisdiction to make the order authorizing the issuance of the writ of attachment; that the order authorizing the issuance of the attachment was contrary to the New Jersey statutes relating to attachments; that the affidavit upon which the attachment was issued is defective in that the proofs are insufficient to justify the issuance of the attachment as a matter of law.

 It is this motion that is now before me after briefing and argument by counsel for the respective parties, Commercial appearing specially therefor. *fn2"

 During the course of the argument it became known that Steel moved before the Superior Court of New Jersey, in the Rommell case, to bring in Commercial as a third party defendant. When apprised of the removal of the attachment proceedings to this court and of this motion, the Superior Court stayed its disposition of the third party defendant motion pending a determination of the present motion by this court. It is obvious -- and Steel frankly concedes that it is doing everything it can to achieve a consolidation of the issues raised in the Rommell case with those raised in its complaint against Commercial in the same court.

 The attack of Commercial upon Steel's suit is two pronged. First, it contends that jurisdiction cannot be obtained over a non-resident defendant by a plaintiff issuing a writ of attachment against property in its possession allegedly belonging to the defendant. Secondly, that the affidavit submitted by Steel upon its application for the issuance of the writ of attachment was defective in form and substance.

 As to the first of these considerations there is a dearth of authority in New Jersey. Decisions in other jurisdictions are in conflict. *fn3"

 Commercial argued that an attachment proceeding is a summary and extraordinary remedy in derogation of the common law from which it follows that strict compliance with statutory provisions is mandatory. Cases frowning upon the practice have held tightly to this theory or that the objective of garnishment (apparently used interchangeably with attachment) was to reach property or rights in the hands of a third person only. *fn4"

 The source of the right to attachment in New Jersey is its Attachment Act N.J.S.A. 2A:26-1 et seq. and R.R. 4:77-1 et seq. It is silent on the specific right of a plaintiff to attach in his own hands property of a non-resident defendant. The particular provision under which Steel acted is as follows:

 'An attachment may issue out of the superior court, any county court or county district court upon the application of any resident or nonresident plaintiff against the property, real and personal, ...


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