Standard Sur. & Cas. Co. of N.Y. v. Murphy
| Decision Date | 03 April 1941 |
| Docket Number | No. 240.,240. |
| Parties | STANDARD SURETY & CASUALTY CO. OF NEW YORK v. MURPHY et al. |
| Court | New Jersey Supreme Court |
Syllabus by the Court.
1. Where the purchasers of all the capital stock of a bus company paid the purchase price monthly to a trustee, to be used by him for the payment of obligations of the company existing prior to the sale and the balance to be delivered to the seller of the stock, held the purchase money in the hands of the trustee did not constitute funds of the bus company even though the source of the periodic payments may have been the receipts of the bus company.
2. Payments made out of such fund, under the circumstances of this case, on account of a compensation award to an injured employee of the bus company, were not payments by the bus company but payments by the seller of the stock under his agreement to indemnify the purchasers and the company against all claims outstanding at the time of the transfer of the stock.
3. Under the facts in this case, held neither the bus company nor its assignee was entitled to reimbursement, out of a fund arising from a judgment against a third party tort-feasor, for the compensation payments made by the trustee under R.S. 34:15-40, N.J.S.A. 34:15-10, because the compensation was not paid by the employer bus company but by the seller of the stock.
Appeal from Court of Chancery.
Suit by the Standard Surety and Casualty Company of New York against John J. Murphy, Michael Hanley, John E. Anthes, Jr., and others to determine to whom should be paid a portion of judgment recovered by bus driver against third person tort-feasor for injuries sustained by bus driver, for which injuries driver had also received workmen's compensation. From an adverse decree, John J. Murphy appeals.
Decree affirmed.
Fred Frieman, of Newark, and John A. Laird, of New York City, for defendant-appellant.
John W. McGeehan, Jr., of Newark, for defendant-respondent.
The respondent, Michael Hanley, was employed by the Elizabeth-Union-Hillside-Irvington Line, Inc., as a bus driver. On July 7, 1934, he suffered personal injuries as the result of a collision between his bus and a truck of P. Ballantine & Sons, and on May 4th, 1938, recovered a judgment for said cause of action against said P. Ballantine & Sons and Charles Farcher, Jr. The complainant herein, being insurer of said Ballantine corporation, paid Hanley the amount of such judgment, except the sum of $2,500, and filed its bill of interpleader with respect to said sum.
On final hearing, the claimants were reduced to two, namely Hanley, the injured employee, and the appellant, Murphy, who was assignee of the bus line of any interest it had in such fund.
R.S. 34:15-40, N.J.S.A. 34:15-40, provides that an employer who has paid workmen's compensation to an injured employee is entitled to reimbursement out of any judgment recovered by such employee against a third party tort-feasor for such injuries. Murphy asserts that his assignor, the bus company, made such payments to Hanley and that, under the statute, it was entitled to recover the amount of such payments. The dispute arises as to whether the bus company or one Anthes made the compensation payments to Hanley.
It appears beyond dispute that in 1934, John E. Anthes, Jr., was the manager of the bus company; that Anthes and his wife and a brother, Louis Anthes, owned all of its capital stock; that the bus company had no bank account; that its receipts were deposited by Anthes in his personal account; that all claims against the bus company were paid by Anthes out of such bank account; that, shortly after the injury to Hanley, Anthes paid him compensation at the rate of $20 per week, until the sum of $494 was paid. These payments were made prior to February 15, 1935.
The court of chancery found that these payments were made by the general manager, Anthes, out of a fund composed partly of the company's money and partly of his own, but that the presumption is...
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