Moresh v. O'Regan

• Decision Date: 07 July 1937
• Docket Number: No. 250.,250.
• Citation: 192 A. 831
• Parties: MORESH v. O'REGAN et al.
• Court: New Jersey Supreme Court

192 A. 831

MORESH

v. O'REGAN et al.

No. 250.

Court of Errors and Appeals of New Jersey.

July 7, 1937.

Syllabus by the Court.

The Court of Chancery is without jurisdiction to enjoin threatened criminal prosecutions and actions for the collection of statutory penalties for alleged violations of the insurance law when there has been no adjudication in a court of law as to the legality of the conduct which is the basis of the prosecutions.

The CHIEF JUSTICE, HEHER, Justice, and HETFIELD and KAFFERTY, Judges, dissenting.

Appeal from Court of Chancery.

Suit by Irving Moresh against Daniel T. O'Regan, prosecutor, and others. From an adverse decree of the Chancery Court (120 N.J.Eq. 524, 187 A. 619), defendants appeal.

Reversed, with instructions.

David T. Wilentz, of Perth Amboy, Louis J. Cohen, of Newark, Daniel T. O'Regan, of Jersey City, and Frank G. Schlosser, of Hoboken, for appellants. William Boorstein, of Jersey City, and Julius Lichtenstein, of Hoboken, for respondent.

DONGES, Justice.

This appeal brings up a decree of the Court of Chancery entered as a final decree upon stipulation that the petition and exhibits shall be taken as stipulated facts and that the determination thereon shall be taken as on final hearing and a final decree entered.

The proceeding was commenced under the Declaratory Judgments Act (Comp.St.Supp. 1924, § 163—351 et seq.). The petition for injunction and other relief was filed to ascertain the rights of the complainant, Moresh, in view of contracts he made with individuals in Bayonne calling for the payment monthly of a stipulated sum in return for which Moresh would keep in condition, by tightening and otherwise, the glass windows in the contractees' store windows, and in case of breakage would replace the glass. Moresh also sought to restrain the prosecutor of the pleas from pressing an indictment theretofore found for an alleged violation by such contracts of the insurance law, and from instituting or bringing to the attention of the grand jury proceedings involving other alleged violations by reason of like contracts of complainant; and to restrain the Commissioner of Banking and Insurance from instituting and prosecuting any suits for penalties for the violation of the act by reason of such contracts.

The vice chancellor held that the contracts in question were not contracts of insurance; second, that the insurance law did not prohibit individuals from engaging in the insurance business; third, that the Court of Chancery had power to restrain the prosecution of an indictment theretofore found and to restrain the submission of any like questions to the grand jury; fourth, that the Court of Chancery had power to enjoin the Commissioner of Banking and Insurance from instituting and prosecuting civil proceedings, in their nature punitive, for alleged violations of the act; and, fifth, that the court had power to proceed and determine all the questions under the Declaratory Judgments Act.

We are met, in limine, with serious questions touching the jurisdiction of equity to afford relief in the circumstances of this case.

It is true that the jurisdiction of the Court of Chancery was not questioned in that court, nor is the question argued here. It is well settled, however, that jurisdiction may not be conferred by consent, nor assumed by acquiescence. Chief Justice Gummere, speaking for this court, in Borough of West Long Branch v. Hoch, 99 N.J.Eq. 356, 131 A. 889, 890, said: "It is enough to say, in disposing of this contention, that counsel cannot, by mere silence or by express consent, confer upon courts of equity the power to determine litigated matters which, under our judicial system, must be settled in a court of law, or, stated in another way, strip the law courts of jurisdiction conferred upon them under the Constitution, and transfer it to courts of equity. If counsel for the defendants had moved to dismiss the bill for lack of jurisdiction in a court of equity, a refusal to grant this motion could not have been legally justified." To the same effect is Pridmore, Trustee et al. v. Steneck et al., 122 N.J.Eq. 35, 191 A. 861, decided by this court.

We now take up the question of jurisdiction. Mr. Justice Gray, writing the opinion for the United States Supreme Court in Re Sawyer, 124 U.S. 200, 8 S.Ct. 482, 487, 31 L.Ed. 402, said: "The office and jurisdiction of a court of equity, unless enlarged by express statute, are limited to the protection of rights of property. It has no jurisdiction over the prosecution, the punishment, or the pardon of crimes or misdemeanors, or over the appointment and removal of public officers. To assume such a jurisdiction, or to sustain a bill in equity to restrain or relieve against proceedings for the punishment of offenses, or for the removal of public officers, is to invade the domain of the courts of common law, or of the executive and administrative department of the government."

He further says:

"Any jurisdiction over criminal matters that the English, court of chancery ever had became obsolete long ago, except as incidental to its peculiar jurisdiction for the protection of infants, or under its authority to issue writs of habeas corpus for the discharge of persons unlawfully imprisoned. * * *

"From long before the declaration of independence, it has been settled in England that a bill to stay criminal proceedings is not within the jurisdiction of the court of chancery, whether those proceedings are by indictment or by summary process," and he cites cases to support.

He further says: "The modern decisions in England, by eminent equity judges, concur in holding that a court of chancery has no power to restrain criminal proceedings, unless they are instituted by a party to a suit already pending before it, and to try the same right that is in issue there."

In Ex parte Young, 209 U.S. 123, 28 S. Ct. 441, 454, 52 L.Ed. 714, 13 L.R.A.(N.S.) 932, 14 Ann.Cas. 764, Mr. Justice Peckham, writing the opinion for the same court, said that it is the general rule that a court of equity has no jurisdiction to enjoin criminal proceedings by indictment or otherwise under the state law, and then said: "But there are exceptions. When such indictment or proceeding is brought to enforce an alleged unconstitutional statute, which is the subject-matter of inquiry in a suit already pending in a Federal court, the latter court, having first obtained jurisdiction over the subject-matter, has the right, in both civil and criminal cases, to hold and maintain such jurisdiction, to the exclusion of all other courts, until its duty is fully performed. * * * But the Federal court cannot, of course, interfere in a case where the proceedings were already pending in a state court." And he further says that if the proceedings are begun after the court of equity has taken jurisdiction, then and then only, they may be enjoined.

We conclude that the Court of Chancery, in the situation herein, was without jurisdiction to enjoin prosecution of indictments.

The relief sought against the Commissioner of Banking and Insurance to restrain the collection of the penalties provided by the insurance law for a violation thereof is likewise without jurisdiction of the Court of Chancery.

"Finally, whenever any forfeiture is provided for by a statute, to be incurred on the doing or not doing some specified act, equity can afford no relief from it, and the same is true of a statutory penalty." 1 Pomeroy's Equity Jurisprudence, Fourth Ed. par. 458, p. 870.

In Brunetto v. Town of Montclair, 87 N.J.Eq. 338, 100 A. 201, 202, Mr. Justice Trenchard, speaking for this court, said: "An injunction will not issue to restrain a prosecution for a penalty under a municipal ordinance regulating the erection of buildings on the mere ground that such an ordinance is invalid, or that it does not bind the property of the party seeking the injunction. Such grounds, if sound, constitute a complete defense to the prosecution in a court of law, and if convicted he has an adequate remedy by...