Howard v. Harwood's Restaurant Co.

• Decision Date: 07 October 1957
• Docket Number: No. A--2,A--2
• Citation: 135 A.2d 161,25 N.J. 72
• Parties: Henrietta HOWARD, by her guardian ad litem, Ralph O. Howard, Petitioner-Respondent, v. HARWOOD'S RESTAURANT CO., a New Jersey corporation, Respondent-Appellant.
• Court: New Jersey Supreme Court

Page 72

25 N.J. 72

135 A.2d 161

Henrietta HOWARD, by her guardian ad litem, Ralph O. Howard Petitioner-Respondent, v. HARWOOD'S RESTAURANT CO., a New Jersey corporation Respondent-Appellant.

No. A--2.

Supreme Court of New Jersey.

Argued Sept. 4 and 9, 1957.

Decided Oct. 7, 1957.

On appeal from Superior Court, Appellate Division, whose opinion is reported in 43 N.J.Super. 301.

Marshall Crowley, Newark, for respondent-appellant (Toner, Crowley, Woelper & Vanderbilt, Newark, attorneys; Herman D. Michels, Newark, on the brief).

Louis C. Jacobson, Newark, for petitioner-respondent.

The opinion of the court was delivered by

BURLING, J.

This is a workmen's compensation case. Petitioner, Henrietta Howard, filed a claim petition for compensation by her husband and guardian Ad litem, Ralph O. Howard. She was awarded compensation and the respondent-appellant appealed the award to the Essex County Court. That court, with written opinion, 40 N.J.Super. 564, 123 A.2d 815 (Cty.Ct.1956), sustained the award, and the respondent-appellant appealed the judgment to the Superior Court, Appellate Division. The Appellate Division, with a brief additional comment, sustained the judgment for the reasons stated in the opinion of Judge Gaulkin below. Respondent-appellant pursuant to a petition, successfully sought certification in this court.

For some four years prior to the incident which resulted in the instant compensation award, Mrs. Howard had performed services for the appellant Harwood's Restaurant Co., a New Jersey corporation which operates a restaurant at 44 Commerce Street, Newark, New Jersey. All the stock of Harwood's Restaurant Co., with the exception of two qualifying shares, is held by Ralph Howard, petitioner's husband, who is president of the corporation. By virtue of her one qualifying share Mrs. Howard is a director of the corporation. Since 1949 she has also served as secretary of the corporation.

Mrs. Howard came to Harwood's in 1950 after relinquishing a previous employment at another restaurant, Farm Food Management, where she had been earning $55 per week. Her usual hours of work were from 9:00 a.m. until between 5:00 and 5:30 p.m. Her husband testified that she was the 'assistant manager' having charge of the office operations. In addition to operating the office she purchased supplies, took care of accounts, kept inventories, audited the activities of waiters, checked the cash register tapes, made the bank deposits, and was in full authority at those times when her husband was not on the premises.

On the morning of January 28, 1954 Mrs. Howard was savagely attacked with a monkey wrench by Lucio L Williamson, a porter and handyman in the employ of appellant. The attack occurred in a room on the second floor of the restaurant, some 50 feet from appellant's office where the cash receipts from the night before had been kept. There were no witnesses. Two separate hypotheses are advanced concerning the motivation for the vicious attack upon Mrs. Howard. The theory advanced by the petitioner is that Williamson had asked Mrs. Howard prior to the attack to advance him some money, which request was refused. Williamson testified at the hearing that he had on past occasions borrowed money from other employees of appellant and that he had frequently taken advances on his salary, which sums were deducted each week from his pay by Mrs. Howard. He further admitted that at the time of the attack he was indebted for a large sum of money. Members of the Newark police department who investigated the case and had inspected the premises where the attack had taken place testified that the office safe was unlocked and that there was money in the safe and money in Mrs. Howard's desk belonging to the corporation. Petitioner surmises that 'Apparently Mrs. Howard, on arriving at the employer's place of business that morning, opened the safe and was preparing the deposit and the cash necessary for the various registers in respondent's place of business.' The inference drawn, which was denied by Williamson, is that the motivation for the attack was robbery; that the brutal beating was a consequence of Williamson's need for money and the refusal of Mrs. Howard to advance him any.

Appellant maintains that robbery was not the motive. Although the safe in the office was found unlocked, the door was closed. Moreover, some $250 in cash receipts in the safe and $85 in a desk drawer were intact. In addition, appellant contends that the testimony of Mrs. Howard, taken from her bedside at the nursing home, that Williamson had requested a loan, should not be given much weight. Her condition was such that she was unable to state her age, what day of the month or week it was, or how long she had been married.

Appellant, relying upon Williamson's testimony at the hearing, advances the hypothesis that the attack was motivated by an insane 'delusional impulse on the part of Williamson in that he thought he was punishing his common law wife for a wrong she may have done him or that he thought she had done.' Whether acceptance of appellant's hypothesis would necessitate reversing the judgment will be discussed later in the opinion.

Little can be gained from recounting in detail here the nature of the injuries sustained by Mrs. Howard as a result of the brutal attack upon her person. It is sufficient to note that as a result of numerous injuries sustained by her she was rendered continuously unconscious for some 50 days, and was hospitalized for over 100 days during which time she underwent brain and plastic surgery and tracheotomy. After several periods of hospitalization and setbacks she was admitted to a nursing home where she remains today, totally and permanently disabled. She suffers from paralysis of her left arm and leg, a traumatic cataract and frequent periods of convulsion.

The expert medical opinion adduced at the hearing indicates that petitioner's prognosis as a useful citizen is hopeless and that after a time lapse of a year and a half her pathology is irreversible. The medical testimony further indicated that physiotherapy to petitioner's left arm and leg was palliative and could not restore the usefulness of the affected members. With perhaps the exception of the taking of anticonvulsive medicines under the supervision of a physician, the care and treatment at the nursing home could in no wise 'cure' Mrs. Howard. They are rendered solely for the purpose of relief, I.e., of easing or alleviating her suffering.

The judgments below determined that on January 28, 1954 Mrs. Howard was an employee of the appellant at a wage of $50 per week, plus meals, and that on that date she suffered injury by accident arising out of and in the course of her employment. She was awarded temporary disability from January 28, 1954 to September 21, 1954, at the rate of $30 per week, amounting to $1,015.71. From September 21, 1954 she was awarded total and permanent disability payments for a period of 450 weeks, amounting to $13,500, and at the expiration of such period such further benefits that she is entitled to receive by virtue of R.S. 34:15--12(b), N.J.S.A. Appellant was ordered to pay $11,254.50 for hospital, medical and nursing services and maintenance at a nursing home up to July 25, 1955, and was further ordered to defray in the future any costs for such medical services, nursing services, drugs and the maintenance of the petitioner 'as may be required.'

I.

Appellant's initial attack is upon the findings below that petitioner was an employee of Harwood's Restaurant Co., within the meaning of R.S. 34:15--36, N.J.S.A. In limine, it should be noted that Mrs. Howard is not disabled from processing her claim because she is a director and officer of the corporation. It is now the settled law of this jurisdiction that corporate officers are not precluded from workmen's compensation benefits and that when they 'perform work which if performed by anyone else would confer employee status for the purposes of the Workmen's Compensation Act the officers have that status.' Mahoney v. Nitroform Company, 20 N.J. 499, 504, 120 A.2d 454, 457, (1956). The sole question presented on the present issue is whether the services rendered by petitioner were performed 'for financial consideration,' as required by R.S. 34:15--36, N.J.S.A. This court is asked to invoke its discretionary authority under R.R. 1:5--4(b) to make new or amended findings of fact for the reason that petitioner did not sustain the burden of proving that she performed services for remuneration. See Temple v. Storch Trucking Co., 3 N.J. 42, 48, 68 A.2d 828 (1949). Examination of the record for that limited purpose indicates the contrary.

Petitioner's husband testified that from the time that petitioner came to work for Harwood's there was an 'understanding' between them that she was to receive a salary of $50 per week, which monies were to be paid 'if and when the Company can afford to pay her.' Although there were years in which the corporation made a profit, there is no evidence that the salary was ever paid. Moreover, the books of the corporation for the period in question do not contain any reference to the arrangement, nor do the records disclose that any payroll deductions for withholding tax or social security were made. Were this the only evidence of the arrangement, considering the self-serving nature of declarations of Mr. Howard, a serious question of credibility would be raised and this court might well be impelled to reverse the findings of fact below. See Pratico v. Rhodes, 17 N.J. 328, 335, 111 A.2d 399 (1955).

Mr. Howard further testified that late in the year 1953 an additional agreement was entered into between himself acting for the corporation and his wife. The motivating factor for the new agreement was an expressed concern over petitioner's social security status. It was decided that the salary obligation to petitioner of $50 per week from 1950 until the...