Judson v. Peoples Bank & Trust Co. of Westfield

• Decision Date: 13 December 1954
• Docket Number: No. A--29,A--29
• Citation: 110 A.2d 24,17 N.J. 67
• Parties: Thomas H. JUDSON, Jr., and William Russell Judson, Trustees, etc., et al., Plaintiffs-Appellants, v. PEOPLES BANK AND TRUST COMPANY OF WESTFIELD et al., Defendants-Respondents.
• Court: New Jersey Supreme Court

Page 67

17 N.J. 67

110 A.2d 24

Thomas H. JUDSON, Jr., and William Russell Judson, Trustees etc., et al., Plaintiffs-Appellants, v. PEOPLES BANK AND TRUST COMPANY OF WESTFIELD et al Defendants-Respondents.

No. A--29.

Supreme Court of New Jersey.

Argued Oct. 18, 1954.

Reargued Nov. 15, 1954.

Decided Dec. 13, 1954.

Joseph A. Weisman, Newark, argued the cause for appellants. (Weisman & Freedman, Newark, attorneys).

Walter J. Bilder, Newark, argued the cause for respondent Bankers Commercial Corp. (Bilder, Bilder & Kaufman, Newark, attorneys; Walter J. Bilder, Newark, on the brief).

The opinion of the court was delivered by

WILLIAM J. BRENNAN, Jr., J.

Plaintiffs' complaint alleges that the five defendants fraudulently conspired to oust them from control of Tuttle Brothers, Inc., a New Jersey corporation doing business in Westfield, by inducing them to part with their common voting stock, over 90% Of the outstanding shares, at an unconscionable price less than a tenth of its value.

Plaintiffs accepted $2,500 from two of the defendants, Peoples Bank and Trust Company of Westfield and the estate of Charles M. Smith (Smith had been an officer of the bank, which is the executor of his will), and consent judgments of dismissal were entered as to them. Summary judgments were thereafter entered in favor of the remaining defendants, Bankers Commercial Corporation, John C. Evans and the Sturdy Company, a New Jersey corporation solely owned by said Evans. The appeal is from the summary judgments and was certified here of our own motion while pending in the Appellate Division.

Summary judgment was granted first to Bankers Commercial Corporation (which we shall designate 'Bankers') upon its motion based on a supporting affidavit of the president of Peoples Bank and Trust Company and 'the pleadings and papers on file,' which included the depositions of plaintiff Thomas H. Judson, Jr., of the defendant John C. Evans, and of Raymond J. Conlan, a vice president of Bankers, together with a comprehensive pretrial order and the mentioned judgments of dismissal. In an opinion filed by the trial judge two grounds were given, First, that the allegations as to Bankers 'cannot be sustained because they are untrue. This defendant did not conspire with the other defendants to unlawfully wrest control of Tuttle from the plaintiffs'; and, Second, that the settlement with Peoples Bank and Trust Company and the Estate of Charles M. Smith, in the form taken, operated as an acceptance of satisfaction discharging all defendants.

After the opinion was filed, defendants John C. Evans and the Sturdy Company moved for and were granted summary judgments, apparently upon the second ground.

I.

The summary judgment in Bankers' favor is not supportable upon the first ground. We consider that the trial judge improperly decided from conflicting proofs the material fact of Bankers' participation in the allegedly fraudulent scheme and thus misconceived the judicial function in the summary judgment procedure. The role of the judge in that procedure is to determine whether there is a genuine issue as to a material fact, but not to decide the issue if he finds it to exist. See Asbill and Snell, Summary Judgment Under the Federal Rules, 51 Mich.L.Rev., 1143, 1155 (1953).

The summary judgment procedure was first introduced in England in 1855 and in New Jersey, among the first of the states, in our Practice Act of 1912. Clark and Samenov, The Summary Judgment, 38 Yale L.J. 423, 424, 442 (1929). Originally restricted to creditor claimants suing to recover upon liquidated debts and demands, modern procedural systems, particularly those, like New Jersey's, modeled upon the Federal Rules of Civil Procedure, 28 U.S.C.A., make summary judgment procedure available in any civil action and to claimants and defending parties alike. R.R. 4:58. It is designed to provide a prompt, businesslike and inexpensive method of disposing of any cause which a discriminating search of the merits in the pleadings, depositions and admissions on file, together with the affidavits submitted on the motion clearly shows not to present any genuine issue of material fact requiring disposition at a trial. Shientag, 4 Ford.L.Rev. 186 (1935). In conjunction with the pretrial discovery and pretrial conference procedures, the summary judgment procedure aims at 'the swift uncovering of the merits and either their effective disposition or their advancement toward prompt resolution by trial.' Clark, The Summary Judgment, 36 Minn.L.Rev. 567, 579 (1952). Even when a case for summary judgment is not made out, the procedure can be a valuable adjunct to pretrial conference procedure when, as may be done under R.R. 4:58--4, there results an order specifying the facts that exist without substantial controversy and directing such further proceedings in the action as are just. Cooper v. Jeter, 17 N.J.Super. 180, 85 A.2d 555 (Cty. Ct.1951).

The standards of decision governing the grant or denial of a summary judgment emphasize that a party opposing a motion is not to be denied a trial unless the moving party sustains the burden of showing clearly the absence of a genuine issue of material fact. At the same time, the standards are to be applied with discriminating care so as not to defeat a summary judgment if the movant is justly entitled to one.

Thus it is the movant's burden to exclude any reasonable doubt as to the existence of any genuine issue of material fact, 6 Moore's Federal Practice, par. 56.15(3). The phrasing of our rule, R.R. 4:58--3, slightly different from Federal Rule 56(c), underscores this in the requirement that the absence of undisputed material facts must appear 'palpably.' All inferences of doubt are drawn against the movant in favor of the opponent of the motion. The papers supporting the motion are closely scrutinized and the opposing papers indulgently treated, Templeton v. Borough of Glen Rock, 11 N.J.Super. 1, 4, 77 A.2d 487 (App.Div.1950). And it is not to be concluded that palpably no genuine issue as to any material fact exists solely because the evidence opposing the claimed fact strikes the judge as being incredible. Arnstein v. Porter, 154 F.2d 464, 469 (C.C.A.2 1946). Issues of credibility are ordinarily for the trier of fact, and the judge does not function as a trier of fact in determining a motion for summary judgment. Where the judge questions the inherent credibility of the matter offered in opposition there are other alternatives to the rejection of the matter and the grant of the motion. Under R.R. 4:58--5 'leave to proceed may be given unconditionally, or upon such terms as to giving security, or time or mode of trial, or otherwise, as may be deemed just.'

However, if the opposing party offers no affidavits or matter in opposition, or only facts which are immaterial or of an insubstantial nature, a mere scintilla, 5 Vanderbilt L.Rev. 607, 613 (1952), 'fanciful, frivolous, gauzy or merely suspicious,' 6 Moore, Federal Practice, par. 56.13(3), he will not be heard to complain if the court grants summary judgment, taking as true the statement of uncontradicted facts in the papers relied upon by the moving party, such papers themselves not otherwise showing the existence of an issue of material fact. Taub v. Taub, 9 N.J.Super. 219, 75 A.2d 822 (App.Div.1950); Lauchert v. American S.S. Co., 65 F.Supp. 703, 707 (D.C.W.D.N.Y.1946). Nor is summary judgment to be denied if other papers pertinent to the motion show palpably the absence of any issue of material fact, although the allegations of the pleadings, standing alone, may raise such an issue. Summary judgment procedure pierces the allegations of the pleadings to show that the facts are otherwise than as alleged. Wade v. Six Park View Corp., 27 N.J.Super. 469, 99 A.2d 589 (App.Div.1953).

Where, as here, the opposing party charges the moving party with willful fraud and must probe the conscience of the moving party (or it officers, when, as here, a corporation) to prove his case, or in any case where the subjective elements of willfulness, intent or good faith of the moving party are material to the claim or defense of the opposing party, a conclusion from papers alone that palpably there exists no genuine issue of material fact will ordinarily be very difficult to sustain. The telltale factor of demeanor in the presence of the trier of fact often assumes such vital importance in such cases that the opposing party should generally not be denied the opportunity to have the moving party, or its officers, appear on the witness stand before the trial of fact. Cf. Cooper v. Jeter, supra; Hummel v. Riordon, 56 F.Supp. 983, 987 (D.C.N.D.E.D.Ill.1944); Mayflower Industries v. Thor Corp., 15 N.J.Super. 138, 155, 83 A.2d 246 (Ch.Div.1951). Indeed, subjective elements aside, a note of caution has been sounded as to any case where the opposing party must prove his claim or defense from what he can draw from the other party. Bozant v. Bank of New York, 156 F.2d 787, 790 (C.C.A.2, 1946). On the other hand, it should be noted that R.R. 4:58--7 dealing with such situations provides that 'should it appear from the affidavits of a party opposing the motion that he cannot for reasons stated present by affidavit facts essential to justify his opposition, the court may deny the motion or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had, or may make such other order as is just.' Plainly, the rule contemplates that a denial of the motion for summary judgment is not always to be the result. The motion may be held and decided after the opposing party has availed himself of an opportunity to develop through affidavits or depositions material necessary to justify his opposition. This expedient has been adopted even in fraud cases. Peckham v. Ronrico Corp., 7 F.R.D. 324 (D.C.P.R.1947), reversed on other grounds 171 F.2d 653 (C.C.A.1, 1948); cf. Standard Accident...