Goldmann, Freund and Haneman. The opinion of the court was delivered by Freund, J.A.D.
Julia Lohmann instituted this action against her husband, Frederick F. Lohmann, for separate maintenance and for an accounting of her share of certain real estate, business partnership, mortgages, and bank accounts, and for reimbursement of moneys advanced by plaintiff for the payment of bills. The separate maintenance litigation was tried first and resulted in a judgment in her favor, entered June 27, 1956.
In treating of the property settlement, the following constitute the essential facts: The Lohmanns were married in 1925. Plaintiff had operated a rooming house and continued to do so after the marriage. The couple lived in her house.
Defendant was then operating a small restaurant and "speak-easy" under lease of premises at 3701-03 Park Avenue, Union City. Through a straw-man, they purchased the Park Avenue premises with their mutual funds and took title to the same as tenants by the entirety. The building contained the tavern on the first floor and six apartments upstairs. In 1933, at the end of Prohibition, defendant's operation was transformed into a duly licensed bar and restaurant. From 1927 to 1953 when the building was destroyed by fire, defendant collected all the rents from the apartments and retained the money for his personal use. He never paid plaintiff any rent for his business use of the first floor, basement and parking area.
On May 3, 1957 judgment was entered in the Chancery Division requiring the defendant to account to plaintiff for, among other things, her one-half interest in the rental value of, and the net rents, issues and profits derived from the Park Avenue premises. Plaintiff appealed from so much of that judgment as denied her an accounting in respect to her alleged partnership in the restaurant business. Defendant cross-appealed on the ground that, in the absence of an ouster or exclusion, he (as cotenant) should not have been held to account to plaintiff for the reasonable rental value of the business property.
The Appellate Division, by majority vote, affirmed the judgment, and there was no further appeal. It held that plaintiff failed to carry the burden of proving the existence of a partnership. On the husband's cross-appeal, the court held that the rents, issues and profits of business premises held by the entirety are owned by husband and wife as cotenants, that the defendant had assumed control of the premises for his sole benefit, that his conduct amounted to an exclusion of plaintiff, and that consequently she was entitled to an accounting, covering a span of 30 years, of the net receipts from the apartments and of the rental value of his business occupancy. Lohmann v. Lohmann , 50 N.J. Super. 37 (App. Div. 1958).
The judgment of May 3, 1957 ordered the defendant not only to account to plaintiff in respect of the business premises in Union City but to reimburse her for payments she made in connection with residential premises at 8 Hamilton Avenue, Weehawken. Plaintiff was directed to present a detailed account of the payments she made. This portion of the judgment was not reviewed on the prior appeal.
Following the affirmance of the judgment in the respects noted, defendant prepared an accounting of the total net rent and rental value of the business premises from 1927 to 1953. Plaintiff, for her part, submitted a schedule of the moneys owed her in connection with the Hamilton Avenue residence. For present purposes, it is important to note only that plaintiff filed an exception to the defendant's account because of its failure to include interest on the amount owed her, and the defendant excepted to plaintiff's account because it failed to credit him with the sum of $4,600 which plaintiff had taken from his safe.
A hearing on the accounting was held in the Chancery Division. After taking testimony (for the most part concerning the accuracy and propriety of the method used by defendant and his appraiser to compute the reasonable rental value of his business occupancy), the trial court entered judgment as follows: as to the business premises, that defendant account to plaintiff for one-half of $55,077.65, or $27,538.83, without interest; as to the residential premises, that defendant account to plaintiff for $4,528.41, but that he be allowed the credit of $4,600 claimed in his exceptions. On the whole accounting, then, judgment was entered in plaintiff's favor for $27,467.24.
Plaintiff appeals, contending error was committed in two respects: the disallowance of interest on the sum owed her from the business premises, and the allowance of the $4,600 credit to defendant.
We consider first the correctness of the trial ruling denying interest to the plaintiff. The question is whether, where property is held ...