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Allen B. Du Mont Laboratories Inc. v. Marcalus Manufacturing Co.

Decided: June 30, 1959.

ALLEN B. DU MONT LABORATORIES, INC., A DELAWARE CORPORATION, PLAINTIFF,
v.
MARCALUS MANUFACTURING CO., INC., A NEW JERSEY CORPORATION, DEFENDANT-RESPONDENT, AND FRANKLIN G. FLOETE, ADMINISTRATOR OF GENERAL SERVICES, ORDERED ADDED AS A PARTY DEFENDANT AS TRANSFEREE OF THE RECONSTRUCTION FINANCE CORPORATION, DEFENDANT-APPELLANT



For reversal -- Chief Justice Weintraub, and Justices Burling, Jacobs, Francis, Proctor, Hall and Schettino. For affirmance -- None. The opinion of the court was delivered by Weintraub, C.J.

Weintraub

[30 NJ Page 293] Defendant, Marcalus Manufacturing Co., Inc., filed a counterclaim in which it included as a

party defendant the Reconstruction Finance Corporation (hereafter R.F.C.), a wholly-owned corporation of the United States. Upon the thesis that the counterclaim was in rem or quasi in rem, process was served upon R.F.C. outside this State by mail pursuant to court order. R.F.C. moved to quash the service. Pending disposition of the motion, R.F.C. was dissolved, whereupon a motion to abate the action against it was made. Marcalus responded with a motion to substitute Franklin G. Floete, Administrator of General Services, an executive agency of the United States, as the alleged statutory transferee of the pertinent function of R.F.C. The Chancery Division denied the motion to quash the service and ordered the substitution of the Administrator. The Appellate Division granted the Administrator leave to appeal from the orders, and we certified the matter on our motion before the Appellate Division considered it.

The Administrator contends the counterclaim is a suit against the United States to which it has not consented. He further urges the claim is necessarily in personam since Marcalus seeks to reform a contract and deed between it and R.F.C., and hence there may not be constructive service of process. As we see the case, there is no need to consider the delicate question of the authority of our courts to summon the federal agency. We reach this result because, for reasons hereafter stated, we find no interest of the Government in whatever res may be deemed to be the subject of the action, nor any need for jurisdiction over the Government or its representative in connection with the claim for reformation. This being so, the sole consequence of a judgment against R.F.C. and the Administrator in the present case would be to bind them with respect to possible subsequent litigation in personam, and they may not be brought in by substituted service to that end.

Marcalus also contends that, if substituted service was improper, yet R.F.C. should be deemed to have appeared generally by reason of a stipulation between counsel extending

its time to "answer or otherwise proceed herein * * *" For reasons to be stated, there was no waiver of the objection to jurisdiction.

I.

R.F.C. owned a tract of land in the Borough of East Paterson. It conveyed to Marcalus the portion lying north of Market Street, reserving by its contract of sale and deed an easement for the benefit of the portion of the tract south of that street. Subsequently R.F.C. conveyed the southerly portion and its interest in the easement to plaintiff, Allen B. Du Mont Laboratories, Inc. Du Mont, as transferee of R.F.C., sues Marcalus to enforce the following provision in the contract of sale and deed between R.F.C. and Marcalus:

"The rights and easements herein required will expire on the 15th day of December, 1952, unless exercised by the Seller, its successors or assigns, on or before the 15th day of December, 1952. If exercised by the Seller, its successors or assigns, the Seller, its successors or assigns shall be required to pay to the Purchaser herein the sum of One Hundred Twenty Thousand Dollars ($120,000.00), such payment to apply to the cost of the following installation:

a. A spur track, to grade, to extend along the above stated easement.

b. A switch-back to be constructed from a point on the above stated spur track, such point to be on the southerly side of Market Street, and extend across Market Street to the westerly side of Building No. 41.

c. Construction of a high-level siding along the easterly side of Building No. 41 to serve that building exclusively."

Du Mont seeks to compel Marcalus to construct the facilities described in the quotation above. Marcalus insists Du Mont must install at its own cost the spur track referred to in "a," and that Marcalus is obligated to provide only items "b" and "c," toward the cost of which it is to receive the stipulated sum of $120,000. Marcalus counter-claimed to reform its ...


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