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First National State Bank of New Jersey v. Kron

Decided: July 18, 1983.

FIRST NATIONAL STATE BANK OF NEW JERSEY, A NATIONAL BANK, ORGANIZED AND EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, PLAINTIFF-APPELLANT,
v.
HAROLD KRON, DEFENDANT-RESPONDENT



On appeal from the Superior Court of New Jersey, Law Division, Bergen County.

Ard, King and McElroy. The opinion of the court was delivered by King, J.A.D.

King

This is an appeal from an order denying appointment of a statutory receiver in aid of execution under N.J.S.A. 2A:17-66. Plaintiff holds a 1978 unsatisfied judgment in the amount of $23,648 plus interest against defendant Kron based on a default on a $20,000 promissory note executed in 1977.

Plaintiff bank has made numerous and varied efforts to collect the judgment including three depositions to discover assets, writs of execution, attempted arrests, alias and pluries writs, contempt proceedings, and orders to compel production of tax returns and business records. Although pressed with diligence by plaintiff bank all have proved unsuccessful. From this record it is obvious that Kron is adept at avoiding service of process. When finally available for questioning he has proved most obdurate and evasive.

Kron purports to be a public accountant but the Board of Certified Public Accountants reports that he is not registered in this State. He denies owning any assets except clothes, a watch, two pairs of cuff links and a clock. His office is in his home on Harvard Place in Fort Lee. He conveyed title to the

house to his wife of 29 years in 1971. He says that she alone owns all furnishings in the home. His wife pays all the bills: "I give her a certain amount of money and she takes care of all the items." He either leases a car or drives a son's car. One of his sons has two master's degrees and attended Cordon Bleu in Paris. The other son is a Columbia Law School graduate and a member of the New York Bar. Kron said that he supported their education and living expenses through 1981 with "the fruits of my labors." In 1980 Kron admitted cashing a $15,000 check on a Canadian bank, in payment for consulting services, before taking a European vacation. Kron keeps no business records. He does not bill clients for his consulting services; apparently, they just pay him. He refused to disclose his clients' names, claiming a non-existent accountant-client privilege. He denied owning any accounts receivable.

Despite court orders, Kron refused to produce his tax returns because of an alleged dispute with I.R.S. He admitted earning over $50,000 in 1979 and earning $100,000 from one client in 1980. When asked under oath in September 1981 if he presently had any of this money, he said: "Well, I doubt that very much. It's very expensive to live today, you know." He admitted receiving $1,500 from a client three days before his 1981 deposition. As to this money, he said: "Its gone. [I] took care of certain debts with it." Some of this money went to his son "who was short at the moment in Paris."

The judge gave five reasons why he would not appoint a receiver in aid of execution under N.J.S.A. 2A:17-66: (1) appointment of a receiver was inappropriate in the case of an individual, (2) the remedy of an order to pay and for contempt was available, (3) the statute was old, (4) the lack of reported cases meant the statute had been forgotten and was no longer viable, and (5) defendant denied having assets but only received "present income." We do not consider these valid reasons for denial of the relief sought.

The statute under which a receiver in aid of execution was sought states in pertinent part:

In aid of execution, the superior court or county court, or, subject to section 2A:18-30 of this title, the county district court, out of which the execution issued may, on application of either the judgment creditor or the defendant and in its discretion, order the appointment of a receiver of the property and things in action belonging or due to or held in trust for the judgment debtor as aforesaid, at the time of the recovery of the judgment or at any time thereafter. [ N.J.S.A. 2A:17-66.]

The statute's antecedents go back to the early 19th century at least. A receiver appointed under Section 17-66 is "vested with the title to the said rights and credits" of the debtor and has the authority to take into his possession any property or debts owed to the debtor. N.J.S.A. 2A:17-67. The receiver has the power to take judicial ...


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