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(84 N. J. Eq. 321)

priate circumstances. If a house should be RAILWAY REVIEW et al. v, GROFF DRILL purchased for purposes of rental, the es

& MACHINE TOOL CO. (No. 35–686.) tablished past and present rental value clear(Court of Chancery of New Jersey. June 26, ly affords a stable basis of its valuation for 1914.)

the purpose named; and in like manner the CORPORATIONS ($ 215*)-STOCK ISSUE_VALUE established earning capacity of a business of OF ASSETS.

the nature of the business here in question Where a corporation was organized to manufacture and sell a patented article in the Unit- must be regarded as a proper basis of its ed States, which at the time had become stand value, for such a business is necessarily purardized on certain railroads, and it then appear-chased solely for and by reason of its peculed that the demand would necessarily increase, iar earning capacity. Nor is it possible for and new conditions which subsequently arose to render the article less valuable could not then any intelligent purchaser to wholly disregard have been anticipated, capitalization on the ba- future prospects. While our statute may not sis of earnings for the preceding year did not contemplate the capitalization of prospective constitute an overvaluation, so as to render stockholders liable to assessment on the subse- future profits, it is clear that no present quent insolvency of the corporation.

earning capacity can be made the intelligent [Ed. Note.–For other cases, see Corporations, basis of valuation without due consideration Cent. Dig. $$ 826–828, 845–848, 852, 854; Dec. of future prospects; but where there are Dig. $ 215.*)

prospects of increased future earning capaciSuit by the Railway Review and others ty, the present earning capacity demonstratagainst the Groff Drill & Machine Tool Com-ed by actual operation clearly affords a proppany. On the receiver's petition for an as- er basis of valuation of a business of this sessment against stockholders of the defend- peculiar nature, if the future prospects are ant, an insolvent corporation. Denied.

not also capitalized. Ott & Carr, of Camden, for receiver. Grey The testimony in this case not only dis& Archer, of Camden, for defendants Paul closes that the earning capacity of the rights and Taylor. H. H. Voorhees, of Camden, for purchased were about $12,000 a year, as defendants Lovekin and Macneir.

shown by profits actually earned during the

year then past, but also that the future prosLEAMING, V. C. There can be no sub- pects of the business reasonably assured stantial doubt touching the facts. The plant much greater profits. The patented article was turned over to the corporation at a had become "standardized” on certain railvaluation based upon its earning capacity roads, and it then appeared that the demand capitalized at 6 per cent. interest. Groff tes- would necessarily increase; the new conditified that a full statement of the earnings tions which arose to render the patented artiwas shown to the directors in full details, cle less valuable could not have been then and all the evidence discloses that what in anticipated. fact was done was to fix a valuation based on The earning capacity of this business canthose earnings. The earnings of the Groff not be regarded as in any sense good will. plant for the year preceding had been about The article which was manufactured, and $1,000 per month or $12,000 a year, and that from the manufacture of which the profits income was capitalized on a 6 per cent. basis arose, was unique and protected by a patent; as the value of the business. While the reso- that situation bears no analogy to a valuation lution refers to the machinery as worth placed upon the hope that established cus$45,000, it is obvious that the real basis of tomers will continue to patronize the same the valuation adopted was that an establish- plant to which they have theretofore extended business, including the machinery and the ed their favors in the purchase of articles exclusive right to manufacture and sell the that could be elsewhere procured. patented article in this country, which could I am convinced that under the evidence in make $12,000 a year, was worth $200,000. this case it cannot be properly determined The theory of the whole transaction clearly by this court that an overvaluation was was that the company was to acquire from made. Groff assets which were producing $12,000 I will advise an order denying an assessper year in profits, and these assets were ac- ment. cordingly valued at $200,000. I find nothing improper or unlawful in that

(86 N. J. L. 555) valuation under the circumstances disclosed


ATLANTIC COUNTY et al. by the evidence. It may be assumed, as held in See v. Heppenheimer, 69 N. J. Eq. 36, 61 | (Supreme Court of New Jersey. Oct. 9, 1914.) Atl. 843, that prospective profits, arising from

(Syllabus by the Court.) the new conditions created by the transfer, EMINENT DOMAIN ($ 180*) — ESTABLISHMENT are not elements that can be considered in as OF DISPOSAL PLANTS NOTICE TO LANDcertaining value for which stock can be is OWNERS. sued. But it cannot be doubted that estab- ipalities to establish disposal plants, notice to

Under Act 1909, p. 138, empowering municlished past and present earning capacity may property owners of the passage of an ordinance be made a proper basis of valuation in appro- under which their property is sought to be tak*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes

en is essential; notice of hearing before com The order appointing commissioners and missioners appointed to assess the value of the all proceedings under it must be set aside, land sought to be taken is not sufficient.

with costs. [Ed. Note. For other cases, see Eminent Domain, Cent. Dig. § 489; Dec. Dig. § 180.*]

(86 N. J. L. 556) Certiorari on the prosecution of Almira M.

REVERUZZI V. CARUSO et al. Loudenslager and others against the Clerk (Supreme Court of New Jersey. Oct. 9, 1914.) of Atlantic County and Ventnor City to review an order appointing commissioners to

(Syllabus by the Court.) assess the value of land to be taken.' Order SET-OFF AND COUNTERCLAIM (8 44*)-WHEN set aside.


Under the district court acts providing for Argued June term, 1914, before TRENCH- set-off, joint and separate debts cannot be set ARD, BERGEN, and BLACK, JJ.

off against each other. J. Edward Ashmead, of Newark, for prose-Counterclaim, Cent. Dig. $8' 82-96, 98, 99;

[Ed. Note.-For other cases, see Set-Off and cutors. J. S. Westcott, of Atlantic City, for Dec. Dig. $ 44.*] defendants.

Appeal from District Court of Orange. BLACK, J. The writ of certiorari in this

Action by Angelo Reveruzzi against Pas

Judgment for case was allowed by Mr. Justice Kalisch to quale Caruso and others. review the validity of an order made by him plaintiff, and defendants appeal. Affirmed. on May 23, 1914, appointing three commis

Argued June term, 1914, before TRENCHsioners, to fix the compensation to be paid ARD, BERGEN, and BLACK, JJ. for lands owned by the prosecutors and Egidio W. Mascia and Edwin C. Caffrey, sought to be condemned by Ventnor City, for both of Newark, for appellants. William A. use in connection with the construction and Lord, of Orange, for appellee. maintenance of a sewage disposal plant proposed to be erected by the city. The pro BLACK, J. This is an appeal from the ceedings are under the act (P. L. 1909, p. Orange district court. Judgment was given 138, and P. L. 1911, p. 724) and by an ordi- for the plaintiff for $100. The case was tried nance which is known as "Ordinance No. 6" by the judge without a jury. The suit was of Ventnor City.

on a replevin bond. The only controverted There are six reasons urged by the prose- point is whether one of the defendants, Pascutors why this order should be set aside. quale Caruso, had a right to have a set-off It is only necessary to consider the first, allowed. He offered to prove the amount which is fatal, and that is that the common of a set-off, filed in the case, for $90, alleged council of Ventnor City did not give any no-to be owing by the plaintiff to one of the detice of its intention to pass and adopt the or- fendants, Pasquale Caruso. The trial court dinance authorizing the improvement. It is overruled this offer of testimony, on the argued that, because the statute under which ground that a set-off of one defendant the proceedings are authorized does not re- against the plaintiff could not be made availquire notice, no notice is essential; but the able, in a suit brought by the plaintiff, cases concerning assessments for benefits are against such defendant and another jointly, quite uniform in holding that, where the act on a replevin bond. We think the ruling of is judicial in character, a notice is necessary, the trial court was correct. This right of the it being contrary to natural justice that a defendant is claimed under the statutes reperson should be bound by proceedings of a lating to district courts (P. L. 1912, p. 379, judicial character affecting his person or $ 12), which reads, "Subject to rules, the deproperty without having an opportunity to fendant may counterclaim or set off any be heard. Groel v. Newark, 78 N. J. Law, 'cause of action," and sections 60 and 61, 144, 73 Atl. 522. That class of cases cannot Compiled Statutes of New Jersey, vol. 2, p. be distinguished in principle from the one 1970. These statutes are not essentially difunder investigation, nor can it be success- ferent from the general statute of set-off. fully maintained that the determination by compiled Statutes of New Jersey, vol. 4, the city to establish a disposal plant and p. 4836. Chancellor Green stated the rule take the prosecutors' land for that purpose thus: is not an act essentially judicial in char "The general rule in equity, as well as at law, acter. Sears v. Atlantic City, 73 N. J. Law, is that joint and separate debts, or debts ac712, 64 Atl. 1062, 118 Am. St. Rep. 724. Nor cruing in different rights, cannot be set off is it sufficient that the prosecutors will re- of set-off, the rule is inflexible; but in equity,

against each other. At law, under the statutes ceive notice in the condemnation proceedings special circumstances give rise_to exceptions." and have an opportunity to be heard, because Brewer v. Norcross, 17 N. J. Eq. 225. this notice only enables the landowners to Naylor v. Smith, 63 N. J. Law, 596, 44 Atl. be heard upon the question of the amount of 649, is an apt illustration, where a set-off the award. They are entitled to be heard was disallowed in a suit under the Mechanupon the proceedings, which are liable to re- ic's Lien Act, and the set-off arose in a difsult in taking their land. Sears v. Atlantic ferent right. So, in Indiana, in a suit on a City, 72 N. J. Law, 436, 60 Atl. 1093.

replevin bond, it was held, under the statute

*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep’r Indexes

of that state, that a note executed by one of to convert à periodical payment into a sum in two obligees cannot be set off in an action on hand, and, the jury being presumed to have the bond. Ringgenberg v. Hartman, 124 Ind.

so understood it, the instruction was correct. 186, 24 N. E. 987. In that case, it was said Dig. $$ 142-148; Dec. Dig. $ 104.*]

[Ed. Note.-For other cases, see Death, Cent. to be a fundamental principle that a set-off 6. APPEAL AND ERROR ($ 1056*)-RULINGS cannot exist in a case where there is a want


The court's exclusion of a preliminary quesThe judgment is therefore affirmed.

tion, on an issue as to a mother's damage by the wrongful death of her son asking if her husband

did not make good wages in order to minimize (87 N. J. L. 487)

her pecuniary loss by the death of her son, was

not prejudicial to defendant. BROWN v. ERIE R. CO. (No. 1.)

[Ed. Note.-For other cases, see Appeal and (Court of Errors and Appeals of New Jersey. Error, Cent. Dig. $$ 4187-4193, 4207; Dec. Sept. 25, 1914.)

Dig. § 1056.*] 1. RAILROADS ($ 350*)-CROSSING ACCIDENT Appeal from Supreme Court. GATES-STATUTE-APPLICATION. P. L. 1909, p. 54, provides that, when trix of William Jacobs, deceased, against the

Action by Johanna Brown, as administraever any railroad company maintains safety gates at a crossing and a person is struck by à Erie Railroad

Erie Railroad Company. A judgment for locomotive while attempting to cross the tracks plaintiff was reversed by the Supreme Court, when the gates are not down, the question and she appeals. Reversed, and judgment of whether he was guilty of contributory negligence shall be determined by the jury in all actions the circuit court affirmed. to recover damages therefor. Held, that such act is not limited to crossings in cities, but ap

Alexander Simpson, of Jersey City, for applies as well to injuries at crossings partly in a pellant. Collins & Corbin, of Jersey City, township and partly in a borough, where the for respondent. railroad company had established crossing gates. [Ed. Note.-For other cases, see Railroads,

WALKER, C. This was a suit for damCent. Dig. SS 1152–1192; Dec. Dig. $ 350.*]

a ges under the death act. The disputed 2. STATUTES ($ 210*)-CONSTRUCTION PRE

questions of fact were as to whether the view AMBLE.

Resort may be had to the preamble or re- of the deceased was obstructed by freight citals of legislative intent in a statute only when cars at the crossing of the defendant comthe enacting part is ambiguous and doubtful. pany's tracks where the accident happened ; [Ed. Note.-For_other cases, see Statutes,

also, whether any warning was given of the Cent. Dig. $ 287; Dec. Dig. $ 210.*]

approach of the train by bell or whistle; 3. STATUTES ($ 210*) – ENACTING CLAUSE

also, whether the crossing gates were up or PREAMBLE.

The enacting clause of a statute can be ex- | down at the time. The case was submitted tended by the preamble, but cannot be restrained to the jury, who found for plaintiff, and deby it.

fendant appeals. [Ed. Note.-For other cases, see Statutes, Cent. Dig. § 287; Dec. Dig. § 210.*]

[1] The controverted questions of fact were

involved in that of contributory negligence 4. RAILROADS ($ 330*)—CROSSINGS SAFETY GATES-DUTY TO OPERATE.

under chapter 35 of the Laws of 1909, P. L. P. L. 1909, p. 137, provides that whenever p. 54, wherein it is provided that when a a railroad has installed safety gates at a cross- person is killed or injured when attempting ing any person approaching the crossing shall, to cross the tracks of a railroad company, during such hours as posted notice at the crossing shall specify, be entitled to assume that such by being struck by a locomotive or train gates are in proper order and duly operated, un- where gates are maintained and such gates less a written notice bearing the inscription are not down at the time of the injury, the “out of order” be posted, and in any action brought for injuries to a person at such cross- question as to whether the person killed or ing plaintiff shall not be barred because of a injured was or was not guilty of contribufailure to stop, look, and listen before crossing. tory negligence shall be a question to be deHeld that, where a railroad company had pro- termined by the jury. The trial court pervided gates at a grade crossing, that it had not posted any notice specifying at what hours the mitted the jury to find liability against the gates would be operated did not render the sec- defendant by reason of the fact, if it were tion inapplicable, and the company, not having a fact, that the gates were not down. The posted such notice, was estopped to complain Supreme Court in reversing the judgment that a person passing over the tracks when the gates were up was not entitled to assume that said this statute of 1909 was inapplicable, they were in good order and would be properly because the accident happened at a crossing operated.

partly in a township and partly in a borough, [Ed. Note.- For other cases, see Railroads, meaning, evidently, that the act applied only Cent. Dig. $$ 1071-1074; Dec. Dig. $ 330.*]

to crossings in cities. We cannot take that 5. DEATH ($ 104*)-ACTIONS-INSTRUCTIONS


In a mother's action for the wrongful death The title of the act is unrestricted. It of her son, the court instructed the jury to al is: "An act relating to accidents at railroad low the capital sum which would represent the crossings." money which plaintiff had a reasonable expecta- broad. It reads:

The enacting clause is equally tion of receiving from decedent during the term of her natural life, and then capitalize that in "1. Whenever any railroad company shall a fixed sum and let that be the verdict. Held, have assumed to establish and maintain what that the word "capitalize" as so used meant: are known as safety gates at any

railroad cross*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes

ing in this state, and a person is killed or in the act was intended to apply. It has never jured at such crossing by being struck by a loco- | been disputed that the preamble to an act may motive or train when attempting to cross the properly be used to ascertain and fix the subjecttracks at a time when such gates are not down, matter to which the enacting part is to be as required by any statute giving the railroad applied." the right to run through an incorporated city at

There is nothing in this which is inconany rate of speed they see fit, upon compliance with the provisions of such statute that in all sistent with what was said in Den v. Urison, such cases the question whether the person so supra, by Mr. Justice Pennington in the Sukilled or injured, upon attempting to cross such preme Court (2 N. J. Law, *224), viz.: railroad crossing, at a time when the safety gates at such crossing are not down, was or was law, that the preamble cannot control the en

“It appears to me, to be a settled principle of not guilty of contributory negligence shall be a question to be determined by the jury, in all ac- acting part of the statute, in cases where the tions brought to recover damages for such loss enacting part is expressed in clear, unambiguous

in of life or personal injury.”

acting part, the preamble may be resorted to, to It is true the act contains a preamble, as explain it, and show the intention of the lawfollows:

maker. The enacting part of this statute is “Whereas, by the provisions of the statutes of clear and explicit; there is no ambiguity on the this state, it has been provided that whenever face of it. Shall we then go out of the enacting a railroad company shall have enclosed its right part, which is clear and intelligible, and resort of way through any incorporated city of this then have recourse to the same preamble, to ex

to with , shall have established and maintained gates at plain this ambiguity? It appears to me that street crossings, as provided by the provisions of this would be carrying the office of the

preamany statute of this state, that upon sach compli- ble beyond anything heretofore contemplated, by ance with such provisions the said railroad com- giving it a paramount authority to the enactpany could run over the part of their said so en

ing part of the statute itself.” closed road through any incorporated city of Nor is there anything in that case (Cooper this state ‘at any rate of speed they may deem Hospital v. Camden) which is inconsistent proper, and that such speed should not, thereafter, be restrained by any city ordinance to with the doctrine held by the Supreme Court regulate the same.

in Quackenbush v. State, 57 N. J. Law, 18, The provision in the enacting clause that at page 21, 29 Atl. 431, at page 432, wherein where a person is killed or injured when it was said: such gates are not down “as required by any

"It is well settled that where the intention of statute giving the railroad the right to run

the Legislature is clearly expressed in the purthrough any incorporated city at any rate restrain it, although it be of much narrower im

view or body of the act the preamble shall not of speed they may see fit, upon compliance port. Sedgw. Stat. & Const. L. 43. The prewith the provisions of such statute,” is amble cannot restrict the enacting clauses exmeant not to excuse, but to render liable, cept where their language is ambiguous or un

certain. Pott. Dwar. Stat. 267; End. Stat. railroad companies running trains through 82; 1 Kent, 460; Den v. Dubois, 16 N. J. Law, cities at any rate of speed; and is not 285, 295." meant to limit the liability of railroad com Now, the enacting clause of chapter 35 of panies for accidents on railroad crossings the Laws of 1909, omitting reference to exwhere safety gates are established, wherever isting law requiring safety gates to be down those crossings may be, whether within or when trains are approaching and passing, without the limits of an incorporated city, reads as follows: unless the precautionary measure of lowered “1. Whenever any railroad company shall gates is an accomplished fact on the given have assumed to establish and maintain what occasion.

are known as safety gates at any railroad cross

ing in this state, and a person is killed or in[2, 3] It seems to be established that, in jured at any such crossing by being struck by a cases of doubt as to the proper construction locomotive or train when attempting to cross the of the body of a statute, resort must be had tracks at a time when such gates are not down, to the preamble or recitals for the purpose whether the person so killed or injured, upon at

that in all such cases the question of ascertaining the legislative intent. But tempting to cross such railroad crossing, at a where the enacting part of the statute is time when the safety gates at such crossing are unambiguous, its meaning will not be con

not down, was or was not guilty of contributrolled or affected by anything in the preamble mined by the jury, in all actions brought to re

tory negligence shall be a question to be deteror recitals. The enacting clause of a statute cover damages for such loss of life or personal may be extended by the preamble, but can injury.” not be restrained by it. 36 Cyc. 1132; 'Den The requirement referred to in the omitted v. Urison, 2 N. J. Law, *212, 224; James portion of the above-quoted enacting clause v. Dubois, 16 N. J. Law, 285; Quackenbush reads as follows: v. State, 57 N. J. Law, 18, 21, 29 Atl. 431. “Cause the same (gates) to be closed at least

In Cooper Hospital v. Camden, 70 N. J. half a minute before any train may cross such Law, 478, 57 Atl. 260, it is laid down by highway and until such train shall have passed

by. the Supreme Court that to ascertain the intention of the Legislature we must look at in section 22 of the general railroad act)

Inserting this provision (which is contained the preamble of the act, citing from Pott. into chapter 35 of the Laws of 1909, instead Dwar. Stat. 265, as follows:

of the reference to it contained in the stat“The preamble states with more or less accuracy the object of a law and the occasion of its ute, it would read as follows: making. Its first legitimate and unquestioned “1. Whenever any railroad company shall use is to ascertain what the cases are to which I have assumed to establish and maintain what


are known as safety gates at any railroad cross- | crossed by a railroad track at grade, and ing in this state, and a person is killed or in- that a flagman shall be stationed there, or jured at any such crossing by being struck by that some other reasonable provisions for a locomotive or train when attempting to cross the tracks at a time when such gates are not protecting such crossing shall be adopted. down (at least half a minute before any train

It may have been in virtue of proceedings shall have passed by), that in all such cases the under this section that the gates in question question whether the person so killed or injur- were installed, or the company may have ed, upon attempting to cross such railroad cross- “assumed” to establish and maintain them ing, at a time when the safety gates at such as mentioned in chapter 35 of the acts of crossing are not down, was or was not guilty of contributory negligence shall be a question to

1909. Whatever the authority or reason for be determined by the jury, in all actions brought their erection, they must be operated, that is, to recover damages for such loss of life or per- raised and lowered, and, under chapter 35 sonal injury.

of the Acts of 1909, must be down when a The only provision of the railroad law train approaches and passes a highway, in which authorizes a company to run its trains order to afford protection to the company for through a city at any rate of speed is sec- death or injury to persons. tion 22, 3 Comp. Stat. 1910, p. 4230, and [4] The Supreme Court, in Wolcott v. N. reads as follows.

Y. & L. B. R. R. Co., 68 N. J. Law, 421, 53 “Any railroad company may erect a fence or Atl. 297, decided that when a railroad compaother enclosure around its stations so as to pre- ny assumes to protect a highway crossing by

other near its trains, and may exclude from such a flagman it is responsible for injuries reenclosures all persons except travelers; where ceived at that crossing, by a traveler on the tain along its roadway where the same may ad- highway, which have resulted solely from the join a public highway, a fence or embankment negligence of such flagman; and that refour feet high, sufficiently close and strong to sponsibility exists notwithstanding that the prevent children and horses from going through company is under no legal obligation to so the same, or where its tracks shall be laid in a cut at least four feet deep, and shall provide protect the crossing. It is the same in refon each side of the track at any highway cross- erence to gates voluntarily installed. And ing in such city a gate of like height and suffi- this was expressly provided in chapter 96 of ciency, and cause the same to be closed at least the Laws of 1909 (P. L. p. 137). And we half a minute before any train may cross such highway and until such train shall have passed think that that act is also applicable in the by, in such case it shall be lawful for such com- case at bar. It provides: pany to run its trains in said city over the por "Whenever any railroad whose right of way tions of its railroad thus protected and over the crosses any public street or highway, has or portions not adioinin” or crossing any highwav, shall install any safety gates, bell or other deat such rate of speed as it deems proper, but vice designed to protect the traveling public at in the absence of such protection and safeguard, any crossing or has placed at such crossing a the company shall be bound by lawful and rea- flagman, any person or persons approaching any sonable municipal ordinances .regulating the such crossing so protected as aforesaid, shall, speed of its trains along streets and at cross during such bours as posted notice at such

crossing shall specify, be entitled to assume that The enacting clause of chapter 35 of the such safety gates or other warning appliances are Laws of 1909, which provides that when properly operated unless a written notice bear

in good and proper order, and will be duly and gates are not down as required by any stat- ing the inscription 'out of order' be posted in ute giving a railroad the right to run its a conspicuous place at such crossing, or that trains through an incorporated city at any sufficient care whereby such traveler or trav

the said flagman will guard said crossing with rate of speed it may see fit, when read in elers will be warned of any danger in passing connection with section 22 of the general over said crossing, and in any action, brought railroad law, giving such right, provided the for injuries to person or property, or for death gates shall be closed at least half a minute no plaintiff shall be barred of the action because before any train may cross the highway and of the failure of the person injured or killed to until such train shall have passed by, makes stop, look and listen before passing over said the question of contributory negligence, when crossing.” a person is injured or killed at such crossing The argument made by the respondent when the gates are up, a jury question; the that, because there was no notice posted at inference being that if the gates are up the crossing in question specifying at what there is an invitation to persons to cross hours the gates were to be operated, the proupon an assumption that there is no danger vision is not applicable, is unsound. To sancto be apprehended from an approaching tion such a view would, in effect, be to hold train.

that a railroad company by failure, willful or Gates at railroad crossings in cities are otherwise, to observe the spirit of the act, not the only ones provided for in the statute. and regard as a mandate that which is not By section 36 of the general railroad law it enjoined in terms, but arises from the clearis provided that, whenever the governing esi implication, namely, that it shall post body of any township or municipality shall such notice at the given crossing, could deso direct, an application shall be made to the feat the beneficent purposes of the act. Court of Chancery for an order that gates As no notice was posted by the defendant shall be erected across any one or more at the crossing in question, giving informastreets or highways where the same are tion as to the hours when the gates were to

91 A.-65


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