(84 N. J. Eq. 321) RAILWAY REVIEW et al. v. GROFF DRILL CORPORATIONS (§ 215*)-STOCK ISSUE-VALUE priate circumstances. If a house should be purchased for purposes of rental, the established past and present rental value clearly affords a stable basis of its valuation for the purpose named; and in like manner the established earning capacity of a business of the nature of the business here in question must be regarded as a proper basis of its value, for such a business is necessarily purchased solely for and by reason of its peculiar earning capacity. Nor is it possible for any intelligent purchaser to wholly disregard future prospects. While our statute may not contemplate the capitalization of prospective future profits, it is clear that no present earning capacity can be made the intelligent basis of valuation without due consideration of future prospects; but where there are 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 propOn 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. [Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 826-828, 845-848, 852, 854; Dec. Dig. § 215.*] pany. Ott & Carr, of Camden, for receiver. Grey & Archer, of Camden, for defendants Paul and Taylor. H. H. Voorhees, of Camden, for defendants Lovekin and Macneir. The testimony in this case not only discloses that the earning capacity of the rights purchased were about $12,000 a year, as shown by profits actually earned during the year then past, but also that the future pros much greater profits. The patented article had become "standardized" on certain railroads, and it then appeared that the demand would necessarily increase; the new conditions which arose to render the patented article less valuable could not have been then anticipated. LEAMING, V. C. There can be no sub-pects of the business reasonably assured stantial doubt touching the facts. The plant was turned over to the corporation at a valuation based upon its earning capacity capitalized at 6 per cent. interest. Groff testified that a full statement of the earnings was shown to the directors in full details, and all the evidence discloses that what in fact was done was to fix a valuation based on those earnings. The earnings of the Groff plant for the year preceding had been about $1,000 per month or $12,000 a year, and that income was capitalized on a 6 per cent. basis as the value of the business. While the resolution refers to the machinery as worth $45,000, it is obvious that the real basis of the valuation adopted was that an established business, including the machinery and the exclusive right to manufacture and sell the patented article in this country, which could make $12,000 a year, was worth $200,000. The theory of the whole transaction clearly was that the company was to acquire from Groff assets which were producing $12,000 per year in profits, and these assets were accordingly valued at $200,000. The earning capacity of this business cannot be regarded as in any sense good will. The article which was manufactured, and from the manufacture of which the profits arose, was unique and protected by a patent; that situation bears no analogy to a valuation placed upon the hope that established customers will continue to patronize the same plant to which they have theretofore extended their favors in the purchase of articles that could be elsewhere procured. I am convinced that under the evidence in this case it cannot be properly determined by this court that an overvaluation was made. I will advise an order denying an assessment. (86 N. J. L. 555) LOUDENSLAGER et al. v. CLERK OF ATLANTIC COUNTY et al. I find nothing improper or unlawful in that valuation under the circumstances disclosed 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.) (Syllabus by the Court.) Atl. 843, that prospective profits, arising from the new conditions created by the transfer, are not elements that can be considered in ascertaining value for which stock can be issued. 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 commissioners appointed to assess the value of the land sought to be taken is not sufficient. [Ed. Note.-For other cases, see Eminent Domain, Cent. Dig. § 489; Dec. Dig. § 180.*] The order appointing commissioners and all proceedings under it must be set aside, with costs. (86 N. J. L. 556) REVERUZZI v. CARUSO et al. Certiorari on the prosecution of Almira M. Loudenslager and others against the Clerk (Supreme Court of New Jersey. Oct. 9, 1914.) of Atlantic County and Ventnor City to re'view an order appointing commissioners to assess the value of land to be taken. Order set aside. (Syllabus by the Court.) SET-OFF AND COUNTERCLAIM (8 44*)-WHEN ALLOWED-JOINT AND SEPARATE DEBTS. 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. J. Edward Ashmead, of Newark, for prosecutors. J. S. Westcott, of Atlantic City, for defendants. BLACK, J. The writ of certiorari in this case was allowed by Mr. Justice Kalisch to review the validity of an order made by him on May 23, 1914, appointing three commissioners, to fix the compensation to be paid for lands owned by the prosecutors and sought to be condemned by Ventnor City, for use in connection with the construction and maintenance of a sewage disposal plant proposed to be erected by the city. The proceedings are under the act (P. L. 1909, p. 138, and P. L. 1911, p. 724) and by an ordinance which is known as "Ordinance No. 6" of Ventnor City. off against each other. Counterclaim, Cent. Dig. §§ 82-96, 98, 99; [Ed. Note.-For other cases, see Set-Off and Dec. Dig. § 44.*] Appeal from District Court of Orange. Action by Angelo Reveruzzi against PasJudgment for quale Caruso and others. plaintiff, and defendants appeal. Affirmed. Argued June term, 1914,, before TRENCHARD, BERGEN, and BLACK, JJ. Egidio W. Mascia and Edwin C. Caffrey, both of Newark, for appellants. William A. Lord, of Orange, for appellee. BLACK, J. This is an appeal from the Orange district court. Judgment was given for the plaintiff for $100. The case was tried by the judge without a jury. The suit was on a replevin bond. The only controverted quale Caruso, had a right to have a set-off allowed. He offered to prove the amount of a set-off, filed in the case, for $90, alleged to be owing by the plaintiff to one of the defendants, Pasquale Caruso. The trial court overruled this offer of testimony, on the ground that a set-off of one defendant against the plaintiff could not be made available, in a suit brought by the plaintiff, against such defendant and another jointly, on a replevin bond. We think the ruling of the trial court was correct. This right of the defendant is claimed under the statutes relating to district courts (P. L. 1912, p. 379, § 12), which reads, "Subject to rules, the defendant may counterclaim or set off any cause of action," and sections 60 and 61, Compiled Statutes of New Jersey, vol. 2, p. 1970. These statutes are not essentially dif ferent from the general statute of set-off. Compiled Statutes of New Jersey, vol. 4, p. 4836. Chancellor Green stated the rule thus: There are six reasons urged by the prose-point is whether one of the defendants, Pascutors why this order should be set aside. It is only necessary to consider the first, which is fatal, and that is that the common council of Ventnor City did not give any notice of its intention to pass and adopt the ordinance authorizing the improvement. It is argued that, because the statute under which the proceedings are authorized does not require notice, no notice is essential; but the cases concerning assessments for benefits are quite uniform in holding that, where the act is judicial in character, a notice is necessary, it being contrary to natural justice that a person should be bound by proceedings of a judicial character affecting his person or property without having an opportunity to be heard. Groel v. Newark, 78 N. J. Law, 144, 73 Atl. 522. That class of cases cannot be distinguished in principle from the one under investigation, nor can it be successfully maintained that the determination by the city to establish a disposal plant and take the prosecutors' land for that purpose is not an act essentially judicial in character. Sears v. Atlantic City, 73 N. J. Law, 712, 64 Atl. 1062, 118 Am. St. Rep. 724. Nor is it sufficient that the prosecutors will receive notice in the condemnation proceedings and have an opportunity to be heard, because this notice only enables the landowners to be heard upon the question of the amount of the award. They are entitled to be heard upon the proceedings, which are liable to result in taking their land. Sears v. Atlantic City, 72 N. J. Law, 436, 60 Atl. 1093. "The general rule in equity, as well as at law, is that joint and separate debts, or debts accruing in different rights, cannot be set off against each other. At law, under the statutes of set-off, the rule is inflexible; but in equity, special circumstances give rise to exceptions.' Brewer v. Norcross, 17 N. J. Eq. 225. 99 Naylor v. Smith, 63 N. J. Law, 596, 44 Atl. 649, is an apt illustration, where a set-off was disallowed in a suit under the Mechanic's Lien Act, and the set-off arose in a different right. So, in Indiana, in a suit on a 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 two obligees cannot be set off in an action on the bond. Ringgenberg v. Hartman, 124 Ind. 186, 24 N. E. 987. In that case, it was said to be a fundamental principle that a set-off cannot exist in a case where there is a want of mutuality. The judgment is therefore affirmed. (87 N. J. L. 487) BROWN v. ERIE R. CO. (No. 1.) (Court of Errors and Appeals of New Jersey. Sept. 25, 1914.) 1. RAILROADS (§ 350*)-CROSSING ACCIDENTGATES STATUTE-APPLICATION. P. L. 1909, p. 54, provides that, whenever any railroad company maintains safety gates at a crossing and a person is struck by a locomotive while attempting to cross the tracks when the gates are not down, the question whether he was guilty of contributory negligence shall be determined by the jury in all actions to recover damages therefor. Held, that such act is not limited to crossings in cities, but applies as well to injuries at crossings partly in a township and partly in a borough, where the railroad company had established crossing gates. [Ed. Note. For other cases, see Railroads, Cent. Dig. §§ 1152-1192; Dec. Dig. § 350.*] 2. STATUTES (§ 210*)-CONSTRUCTION AMBLE. PRE Resort may be had to the preamble or recitals of legislative intent in a statute only when the enacting part is ambiguous and doubtful. [Ed. Note. For other cases, see Statutes, Cent. Dig. § 287; Dec. Dig. § 210.*] 3. STATUTES (§ 210*) ENACTING CLAUSE — PREAMBLE. The enacting clause of a statute can be extended by the preamble, but cannot be restrained by it. [Ed. Note.-For other cases, see Statutes, Cent. Dig. § 287; Dec. Dig. § 210.*] 4. RAILROADS (§ 330*)-CROSSINGS GATES-DUTY TO OPERATE. - SAFETY P. L. 1909, p. 137, provides that whenever a railroad has installed safety gates at a crossing any person approaching the crossing shall, during such hours as posted notice at the crossing shall specify, be entitled to assume that such gates are in proper order and duly operated, unless a written notice bearing the inscription "out of order" be posted, and in any action brought for injuries to a person at such crossing plaintiff shall not be barred because of a failure to stop, look, and listen before crossing. Held that, where a railroad company had pro'vided gates at a grade crossing, that it had not posted any notice specifying at what hours the gates would be operated did not render the section inapplicable, and the company, not having posted such notice, was estopped to complain that a person passing over the tracks when the gates were up was not entitled to assume that they were in good order and would be properly operated. [Ed. Note. For other cases, see Railroads, Cent. Dig. §§ 1071-1074; Dec. Dig. § 330.*] 5. DEATH ( 104*)-ACTIONS-INSTRUCTIONS— "CAPITALIZE.” In a mother's action for the wrongful death of her son, the court instructed the jury to allow the capital sum which would represent the money which plaintiff had a reasonable expectation of receiving from decedent during the term of her natural life, and then capitalize that in a fixed sum and let that be the verdict. Held, that the word "capitalize" as so used meant to convert a periodical payment into a sum in hand, and, the jury being presumed to have so understood it, the instruction was correct. Dig. §§ 142-148; Dec. Dig. § 104.*] [Ed. Note.-For other cases, see Death, Cent. 6. APPEAL AND ERROR (§ 1056*)—RULINGS ON EVIDENCE-PREJUDICE. The court's exclusion of a preliminary question, 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 her pecuniary loss by the death of her son, was not prejudicial to defendant. [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 4187-4193, 4207; Dec. Dig. 1056.*] Appeal from Supreme Court. trix of William Jacobs, deceased, against the Action by Johanna Brown, as administraErie Railroad Company. A judgment for plaintiff was reversed by the Supreme Court, and she appeals. Reversed, and judgment of the circuit court affirmed. Alexander Simpson, of Jersey City, for appellant. Collins & Corbin, of Jersey City, for respondent. WALKER, C. This was a suit for damages under the death act. The disputed questions of fact were as to whether the view of the deceased was obstructed by freight cars at the crossing of the defendant company's tracks where the accident happened; also, whether any warning was given of the approach of the train by bell or whistle; also, whether the crossing gates were up or down at the time. The case was submitted to the jury, who found for plaintiff, and defendant appeals. [1] The controverted questions of fact were involved in that of contributory negligence under chapter 35 of the Laws of 1909, P. L. P. 54, wherein it is provided that when a person is killed or injured when attempting to cross the tracks of a railroad company, by being struck by a locomotive or train where gates are maintained and such gates are not down at the time of the injury, the question as to whether the person killed or injured was or was not guilty of contributory negligence shall be a question to be determined by the jury. The trial court permitted the jury to find liability against the defendant by reason of the fact, if it were a fact, that the gates were not down. Supreme Court in reversing the judgment said this statute of 1909 was inapplicable, because the accident happened at a crossing partly in a township and partly in a borough, meaning, evidently, that the act applied only to crossings in cities. We cannot take that view. The The title of the act is unrestricted. It is: "An act relating to accidents at railroad crossings." The enacting clause is equally broad. It reads: "1. Whenever any railroad company shall have assumed to establish and maintain what 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 injured at such crossing by being struck by a locomotive or train when attempting to cross the tracks at a time when such gates are not down, as required by any statute giving the railroad the right to run through an incorporated city at any rate of speed they see fit, upon compliance with the provisions of such statute, that in all such cases the question whether the person so killed or injured, upon attempting to cross such railroad crossing, at a time when the safety gates at such crossing are not down, was or was not guilty of contributory negligence shall be a question to be determined by the jury, in all actions brought to recover damages for such loss of life or personal injury." It is true the act contains a preamble, as follows: "Whereas, by the provisions of the statutes of this state, it has been provided that whenever a railroad company shall have enclosed its right of way through any incorporated city of this state with a fence, wall or embankment, and shall have established and maintained gates at street crossings, as provided by the provisions of any statute of this state, that upon such compliance with such provisions the said railroad company could run over the part of their said so enclosed road through any incorporated city of this state at any rate of speed they may deem proper, and that such speed should not, thereafter, be restrained by any city ordinance to regulate the same.' 999 The provision in the enacting clause that where a person is killed or injured when such gates are not down "as required by any statute giving the railroad the right to run through any incorporated city at any rate of speed they may see fit, upon compliance with the provisions of such statute," is meant not to excuse, but to render liable, railroad companies running trains through cities at any rate of speed; and is not meant to limit the liability of railroad companies for accidents on railroad crossings where safety gates are established, wherever those crossings may be, whether within or without the limits of an incorporated city, unless the precautionary measure of lowered gates is an accomplished fact on the given occasion. [2, 3] It seems to be established that, in cases of doubt as to the proper construction of the body of a statute, resort must be had to the preamble or recitals for the purpose of ascertaining the legislative intent. But where the enacting part of the statute is unambiguous, its meaning will not be controlled or affected by anything in the preamble or recitals. The enacting clause of a statute may be extended by the preamble, but cannot be restrained by it. 36 Cyc. 1132; 'Den v. Urison, 2 N. J. Law, *212, 224; James v. Dubois, 16 N. J. Law, 285; Quackenbush v. State, 57 N. J. Law, 18, 21, 29 Atl. 431. In Cooper Hospital v. Camden, 70 N. J. Law, 478, 57 Atl. 260, it is laid down by the Supreme Court that to ascertain the intention of the Legislature we must look at the preamble of the act, citing from Pott. Dwar. Stat. 265, as follows: "The preamble states with more or less accuracy the object of a law and the occasion of its making. Its first legitimate and unquestioned use is to ascertain what the cases are to which 1 the act was intended to apply. It has never been disputed that the preamble to an act may properly be used to ascertain and fix the subjectmatter to which the enacting part is to be applied." There is nothing in this which is inconsistent with what was said in Den v. Urison, supra, by Mr. Justice Pennington in the Supreme Court (2 N. J. Law, *224), viz.: law, that the preamble cannot control the en"It appears to me, to be a settled principle of acting part of the statute, in cases where the enacting part is expressed in clear, unambiguous terms; but in case any doubt arises on the enacting part, the preamble may be resorted to, to explain it, and show the intention of the lawmaker. The enacting part of this statute is clear and explicit; there is no ambiguity on the face of it. Shall we then go out of the enacting part, which is clear and intelligible, and resort to the preamble, to create an ambiguity, and then have recourse to the same preamble, to explain this ambiguity? It appears to me that this would be carrying the office of the preamble beyond anything heretofore contemplated, by giving it a paramount authority to the enacting part of the statute itself." Nor is there anything in that case (Cooper Hospital v. Camden) which is inconsistent with the doctrine held by the Supreme Court in Quackenbush v. State, 57 N. J. Law, 18, at page 21, 29 Atl. 431, at page 432, wherein it was said: "It is well settled that where the intention of the Legislature is clearly expressed in the purview or body of the act the preamble shall not restrain it, although it be of much narrower import. Sedgw. Stat. & Const. L. 43. The preamble cannot restrict the enacting clauses except where their language is ambiguous or uncertain. Pott. Dwar. Stat. 267; End. Stat. 82; 1 Kent, 460; Den v. Dubois, 16 N. J. Law, 285, 295." Now, the enacting clause of chapter 35 of the Laws of 1909, omitting reference to existing law requiring safety gates to be down when trains are approaching and passing, reads as follows: * * * "1. Whenever any railroad company shall have assumed to establish and maintain what are known as safety gates at any railroad crossing in this state, and a person is killed or injured at any such crossing by being struck by a locomotive or train when attempting to cross the tracks at a time when such gates are not down, whether the person so killed or injured, upon atthat in all such cases the question tempting to cross such railroad crossing, at a time when the safety gates at such crossing are not down, was or was not guilty of contribumined by the jury, in all actions brought to retory negligence shall be a question to be detercover damages for such loss of life or personal injury.' The requirement referred to in the omitted portion of the above-quoted enacting clause reads as follows: "Cause the same (gates) to be closed at least half a minute before any train may cross such highway and until such train shall have passed by." in section 22 of the general railroad act) Inserting this provision (which is contained into chapter 35 of the Laws of 1909, instead of the reference to it contained in the statute, it would read as follows: "1. Whenever any railroad company shall have assumed to establish and maintain what are known as safety gates at any railroad cross- I 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 may cross such highway and until such train under this section that the gates in question shall have passed by), that in all such cases the 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 crossing are not down, was or was not guilty of as mentioned in chapter 35 of the acts 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 train approaches and passes a highway, in order to afford protection to the company for death or injury to persons. The only provision of the railroad law which authorizes a company to run its trains through a city at any rate of speed is section 22, 3 Comp. Stat. 1910, p. 4230, and reads as follows. [4] The Supreme Court, in Wolcott v. N. Y. & L. B. R. R. Co., 68 N. J. Law, 421, 53 Atl. 297, decided that when a railroad company assumes to protect a highway crossing by a flagman it is responsible for injuries received at that crossing, by a traveler on the highway, which have resulted solely from the negligence of such flagman; and that responsibility exists notwithstanding that the company is under no legal obligation to so protect the crossing. It is the same in refprotect the crossing. "Any railroad company may erect a fence or other enclosure around its stations so as to prevent persons other than passengers from coming near its trains, and may exclude from such enclosures all persons except travelers; where any railroad company in any city shall maintain along its roadway where the same may adjoin a public highway, a fence or embankment four feet high, sufficiently close and strong to prevent children and horses from going through the same, or where its tracks shall be laid in a cut at least four feet deep, and shall provide on 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 portions of its railroad thus protected and over the portions not adioining or crossing any highwav, at such rate of speed as it deems proper, but in the absence of such protection and safeguard, the company shall be bound by lawful and reasonable municipal ordinances regulating the speed of its trains along streets and at crossings." The enacting clause of chapter 35 of the Laws of 1909, which provides that when gates are not down as required by any statute giving a railroad the right to run its trains through an incorporated city at any rate of speed it may see fit, when read in connection with section 22 of the general railroad law, giving such right, provided the gates shall be closed at least half a minute before any train may cross the highway and until such train shall have passed by, makes the question of contributory negligence, when a person is injured or killed at such crossing when the gates are up, a jury question; the inference being that if the gates are up there is an invitation to persons to cross upon an assumption that there is no danger to be apprehended from an approaching train. Gates at railroad crossings in cities are not the only ones provided for in the statute. By section 36 of the general railroad law it is provided that, whenever the governing body of any township or municipality shall so direct, an application shall be made to the Court of Chancery for an order that gates shall be erected across any one or more streets or highways where the same are 91 A.-65 "Whenever any railroad whose right of way crosses any public street or highway, has or shall install any safety gates, bell or other device designed to protect the traveling public at any crossing or has placed at such crossing a flagman, any person or persons approaching any such crossing so protected as aforesaid, shall, during such hours as posted notice at such crossing shall specify, be entitled to assume that such safety gates or other warning appliances are properly operated unless a written notice bearin good and proper order, and will be duly and ing the inscription 'out of order' be posted in a conspicuous place at such crossing, or that sufficient care whereby such traveler or travthe said flagman will guard said crossing with elers will be warned of any danger in passing over said crossing, and in any action, brought for injuries to person or property, or for death caused at any crossing protected as aforesaid, no plaintiff shall be barred of the action because of the failure of the person injured or killed to stop, look and listen before passing over said crossing.' The argument made by the respondent that, because there was no notice posted at the crossing in question specifying at what hours the gates were to be operated, the provision is not applicable, is unsound. To sanction such a view would, in effect, be to hold that a railroad company by failure, willful or otherwise, to observe the spirit of the act, and regard as a mandate that which is not enjoined in terms, but arises from the clearest implication, namely, that it shall post such notice at the given crossing, could defeat the beneficent purposes of the act. As no notice was posted by the defendant at the crossing in question, giving information as to the hours when the gates were to |