author: Leonard, P. J. A. D.

text:
    STATE OF NEW JERSEY, PLAINTIFF-APPELLANT, v. ROBERT BISACCIA, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Submitted November 18, 1974 —
    Decided December 2, 1974.

      Before Judges Leowabd, Seidman and Bischoee.

      Mr. Joseph P. Lordi, Essex County Prosecutor, attorney for appellant (Ms. Sara A. Friedman, Assistant Prosecutor, on the brief).

      Messrs. Citrino, Balsam & Ford, attorney for respondent (Mr. Thomas P. Ford, Jr., of counsel; Mr. Thomas S. DiBiasi, on the brief).
   The opinion of the court was delivered by

Leonard, P. J. A. D.

Defendant was indicted by the Essex County grand jury for unlawful possession of a revolver on March 30, 1973, in violation of N. J. 8. A. 2A:151-41. Thereafter his motion to suppress the weapon as evidence was granted. The State, with leave first granted, appeals from the order of suppression.

On the above-noted date a special agent of the E.B.I. upon his own affidavit secured a warrant from a federal magistrate to search the person of defendant. In the course of the search the revolver was discovered in defendant’s possession.

The supporting affidavit set forth particularized facts tending to show that defendant was a felon and possessed a firearm on various occasions. However, other than asserting that this was in violation of 18 U. 8. G. A. App. § 1202(a) (Supp.), the affidavit stated no specific facts establishing that the firearms had been involved in interstate commerce. There was no testimony, sworn or otherwise, or any other affidavit presented to the magistrate at the time the warrant was issued.

The- federal officers made no arrest and subsequently they turned the revolver over to state authorities. The aforementioned indictment followed.

Defendant moved to suppress the weapon oh the ground, among others, that there were insufficient facts presented 'to the federal magistrate upon which he could find probable cause to believe that a federal offense had been committed so as to justify the issuance of the search warrant. The trial judge granted the motion, finding that the magistrate “in issuing this warrant, did so without sufficient facts from which he could have reasonably concluded a federal offense was committed by the defendant Bisaccia.”

The State concedes that in order to obtain a conviction under 18 U. S. C. A. App. § 1202(a) (Supp.) the government must prove a nexus with interstate commerce. United States v. Bass, 404 U. S. 336, 92 S. Ct. 515, 30 L. Ed. 2d 488. (1971). However, it contends that in an affidavit for a search warrant specifically alleging a violation of this section of the code, it is not necessary to state those underlying facts showing a connection between a weapon and interstate commerce. This contention lacks merit. United States v. Brouillette, 478 F. 2d 1171 (5 Cir. 1973). Thomas v. United States, 376 F. 2d 564 (5 Cir. 1969). The State’s reliance upon United States v. McShane, 462 F. 2d 5 (9 Cir. 1972), is misplaced. First, the court’s opinion therein does not disclose the contents of the supporting affidavit. Second, defendant was convicted of three federal firearms violations, including a conviction under 18 U. S. C. A. App. § 1202(a), which does not require proof that interstate commerce had been affected.

Next, the State, relying upon State v. Kasabucki, 52 N. J. 110 (1968), asserts that the instant affidavit should be examined in a “common sense way without a grudging or negative attitude” and is not to be viewed with a “hypertechnical eye.” However, the situation present in the instant matter is not comparable to that present in Easabucld. That case dealt with the interpretation to be given to facts that were set forth in an affidavit. It did not concern itself with a supporting affidavit which omitted essential facts.

Finally, the State asserts that the federal magistrate could rely upon information apart from that contained in the affidavit in determining whether probable cause exists. It points to the testimony at the suppression hearing of the assistant attorney in charge of the federal strike force. He testified that on January 18, 1973 he and the agent who executed the present affidavit went before the same federal magistrate to apply for a search warrant involving another individual suspected of committing the same offense. The attorney stated that at that time he told the magistrate that to his knowledge no firearms were manufactured in this State, so that any weapons found in the search would of necessity have had to travel in interstate commerce. He admitted, however, that no such conversation occurred at the time when the instant warrant was obtained.

Preliminarily, it must be noted that a federal search warrant may issue only upon information embodied in a sworn affidavit. Fed. B. Grim. P. 41(c). However, even though in our State such a warrant may be based either upon affidavits or the sworn testimony of witnesses, B. 3:5-3, where oral testimony is relied upon, a stenographic transcript of this testimony or the court’s summary thereof must be filed together with the other requisite papers. B. 3:5-6. Where there is no such transcript or summary, only the affidavit may be considered on the hearing of the motion to suppress. State v. Stolzman 115 N. J. Super. 231 (App. Div. 1971). We concur with the court’s statement in Stolzman, supra at 235, that an apparent contrary finding in State v. Clemente, 108 N. J. Super. 189 (App. Div. 1969), certif. den. 55 N. J. 450 (1970), “was not necessary for the decision in the case because the court had found that the affidavit was sufficient.” Thus, we conclude that the trial court properly refused to consider the alleged oral statement made to the magistrate by the attorney in another matter some two months previously.

Affirmed.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    DEPARTMENT OF CIVIL SERVICE OF THE STATE OF NEW JERSEY, AND GEORGE F. KUGLER, JR., ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, PLAINTIFFS-RESPONDENTS, v. CITY OF NEWARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, ET AL., DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued November 19, 1974 —
    Decided December 4, 1974.

      Before Judges Carton, Crane and Hole.

      Mr. Donald S. Coburn, Assistant Corporation Counsel, argued the cause for' appellants (Mr. Donald E. King, Corporation Counsel, attorney).

      Ms. Erminine L. Conley argued the cause for respondents (Mr. William E. Hyland, Attorney General of New Jersey, attorney).
   Per Curiam.

Defendants, including the City of Newark, appeal from a judgment determining in effect that Newark Housing Authority employees, who have been permanently appointed to a classified position, possess reemployment rights against provisional employees of the city, including those in the Model Cities program, pursuant to N. J. 8. A. 11:22-10.1 and 11:22 — 10.2 and N. J. A. G. 4:1 — 16.5.

Our review of the evidence leads us to conclude that the court below was correct in holding that employees of the Housing Authority who are laid off from their positions and certified on common special reemployment lists are entitled, under the statutory and rule provisions cited, to replace municipal employees in comparable positions, who have not been permanently appointed in the classified service. We see no reason to depart from the holding to that effect by this court in Housing Authority of Jersey City v. Dep’t of Civil Service, 87 N. J. Super. 146 (App. Div. 1965). This procedure accords with the practical construction of the statute by the Department of Civil Service over a period of years with legislative acquiescence.

We are not persuaded by the city’s argument that serious administrative burdens may occur if that opinion is followed here. Only four positions are directly involved on this appeal; the special reemplojunent list is utilized solely against positions that are the same or comparable; it is unlikely (although not impossible) that all employees laid off by the Housing Authority will be certified to positions within the city, and, most importantly, the Housing Authority employees are subject to Title 11 and are therefore fully qualified to perform their jobs.

The exercise by the Department of its authority to require the city to recognize the reemployment rights of the Housing Authority employees is reasonable and accords with the powers conferred upon it by the Civil Service Act. See N. J. S. A. 11:6-2(e); 11:19-2; 11:19-3; Mason v. Civil Service Comm’n, 51 N. J. 115 (1968); De Fazio v. Mayor, etc., Hoboken, 9 N. J. Super. 486, 494 (Law Div. 1950), aff’d 12 N. J. Super. 515 (App. Div. 1951); Campbell v. Dep’t of Civil Service, 39 N. J. 556 (1963).

The other objections raised by the city are untenable. That different salary schedules are used in the city and the Housing Authority is of no significance, since the city is only required to pay the Housing Authority employee the minimum of the. city’s applicable salary range. The evidence does not support tire contention that only expendable employees would be laid off by the Authority and forced upon the city. Once the Authority decides that a particular program is not needed, seniority then dictates which employees are laid off.

It is not unreasonable for the Department to afford different treatment in this respect to employees of boards of education, as opposed to city employees. Unlike a board of education, a local housing authority is an agency of the municipality creating it and is not considered autonomous for purposes of civil service administration. Housing Authority of Jersey City v. Dep’t of Civil Service, supra; De Vita v. Paterson Housing Authority, 17 N. J. 350, 359-360 (1955). School districts often encompass more than one municipality, one of which may not be subject to Title 11, thus making the use of a common list impractical. The Department’s practice as to boards of education is thus predicated on an appropriate exercise of its statutory authority. Cf. Fivehouse v. Passaic Valley Water Comm’n, 127 N. J. Super. 451 (App. Div. 1974), certif. den. 65 N. J. 565 (1974).

The city further argues that Model Cities employees should be exempted from the use of common reemployment lists until they have had an opportunity to be fairly tested for the positions which they presently hold.

According to the terms of a consent judgment entered in this cause on January 21, 1974, the Newark Model Cities pro-g’ram was adjudged subject to Title 31, “Civil Service,” The program was to be incorporated into the Newark civil service system no later than June 1, 1975, in accordance with the following schedule: (a) orientation to begin December 1, 1973; (b) classification to be completed by March 31, 1974; (e) the entire civil service procedure, including classification, to be completed no later than June 1, 1975. The judgment also provided that the city and the Department would cooperate with each other fully and that the city would have “full input” into the classification and examination processes.

The city claims that it would be unfair to permit the Housing Authority employees to replace Model Cities employees who have not yet had an opportunity to take the qualifying examination for their positions. It urges that such replacement not occur until June 1, 1975, when the Model Cities program and positions are fully integrated into the civil service system.

The city’s claim has no basis in law. The statutes plainly require that special reemployment lists such as those here involved be given precedence over all other civil service lists. N. J. S. A. 11:10-1; 11:22-30.1; 11:22-10.2. See also, N. J. A. C. 4:1-16.5 and 4:1-12.3. To receive appointment the Model Cities employees would have to he certified on an open competitive employment list. N. J. 8. A. 11 :9 — 9. Employees on the special reemployment list would have to be certified for the same or comparable position before resort may be had to the competitive employment list.

Thus, assuming that the appropriate classification of positions in the Model Cities program has been made, the statutory mandate would be violated if Model Cities employees were permanently appointed while this special reemployment list exists.

Moreover, the city’s claim must he viewed in the light of the context of this case. Eor the past five years the Department of Civil Service has been endeavoring to facilitate the incorporation of the Model Cities program into the civil service system. There is credible evidence that the city did not cooperate fully in these efforts. Under these circumstances its present concern for affording that program’s employees an opportunity to be tested is tardy. To allow the further delay here sought would contravene the statutory protection afforded the civil service employees who have been laid off by the Housing Authority and may result in the unlawful appointment of Model Cities employees to permanent positions while the special reemployment list is viable.

The judgment is affirmed. The stay thereof entered by the trial court is vacated. No costs.

         N. J. S. A. 11:22-10.1 and 11:22-10.2 apply to an employee who is permanently appointed to a position in the classified service and is separated from such service because of economy or otherwise, and not because of any delinquency or misconduct, or whose position has been abolished.


text:
    TOWNSHIP OF NORTH BERGEN, PLAINTIFF-APPELLANT, v. JOSEPH LORD, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Submitted November 19, 1974 —
    Decided December 5, 1974.

      Before Judges Oaetün, Cbane and Hole.

      Messrs. Rose, Poley, Bromley & Landers, attorneys for appellant (Mr. Charles M. DeFuccio on the brief).

      Mr. Samuel Jacobs, attorney for respondent, filed a statement in lieu of brief.
   Per Curiam.

Defendant, a pushcart vendor of hot dogs, was convicted in the Municipal Court of the Township of North Bergen of violating the provisions of a local health ordinance prohibiting the selling of foodstuffs without a permit. In accordance with the terms of the ordinance a penalty of $25 was assessed but suspended. Defendant appealed to the Hudson County Court where, after a trial de novo on stipulated facts, he was found not guilty.

The County Court judge based his ruling upon a belief that it was not necessary for defendant to have a permit from the municipality in view of the fact that a veteran’s license to hawk, peddle and vend had been issued to him pursuant to N. J. 8. A. 45:24^-9. The judge found that defendant’s activity ■ “was a mobile type operation that comes within the definition of hawking, peddling and vending thereby making the license the defendant obtained from the County Clerk a sufficient authorization for him to do what he did.”

We are of the opinion that the County Court was in error. The ordinance in question was adopted as an exercise of law-making power delegated by the Legislature by virtue of N. J. S. A. 26:3 — 64. Weehawken Tp. Bd. of Health v. N. Y. Central R. Co., 4 N. J. 293, 300 (1950). As sxreh it is entitled to be accorded the same dignity and stature as an enactment of the Legislature so long as it is not inconsistent with another enactment of the Legislature. In interpreting legislative enactments it is the duty of the court to construe them together as a unitary and harmonious whole insofar as that may be possible in order that each may be fully effective. Clifton v. Passaic Cty. Bd. of Taxation, 28 N. J. 411, 421 (1958).

We perceive no logical reason why a health regulation ordinance which by its terms is applicable to all sellers of foodstuffs within the municipality should not be applied to itinerant vendors. The veteran’s licensing statute, N. J. S. A. 45:24-9, in its present form, evidences no intention on the part of the Legislature to preempt the entire field of regulating hawkers, peddlers or vendors; in fact, the statute now specifically permits the regulation by municipal ordinance of hawking, peddling and vending on the public streets and highways. Harrington Park v. Hogenbirk, 52 N. J. Super. 223 (Cty. Ct. 1958). cf. Tagmire v. Atlantic City, 35 N. J. Super. 11 (App. Div. 1955).

It is also apparent that the court erred in its finding of fact that the defendant was engaged in “a mobile type operation.” No testimony was heard by the County Court and no transcript of testimony of the municipal court proceeding was before the County Court. The matter was heard on a stipulation of facts which included the admission that defendant did “on the days and times charged sell ‘Hot Dogs’ at a fixed location, in the vicinity of 87th Street and Bergen-line Ave., North Bergen, N. J.” A veteran’s license to hawk, peddle and vend does not authorize the sale of merchandise from a fixed location. Shapiro v. Newark, 44 N. J. Super. 530 (Law Div. 1957); Newark v. Germano, 20 N. J. Super. 143 (Cty. Ct. 1952).

The judgment of the Hudson County Court is reversed and that of the North Bergen Municipal Court is reinstated.


author: Kole, J. A. D.

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. LILLIAN McCOURT AND GORDON McCOURT, DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Submitted November 26, 1974 —
    Decided December 10, 1974.

      Before Judges Carton, Crane and Kole.

      Messrs. Cooper, Perskie, Neustadler and Katzman, attorneys for appellants (Mr. Steven P. Perskie, on the brief).

      Mr. William F. Hyland, Attorney General of New Jersey, attorney for respondent (Mr. Howard E. Drucks, Deputy Attorney General, of counsel and on the brief).
   The opinion of the court was delivered by

Kole, J. A. D.

Defendant husband was the owner and his wife the operator of an automobile with respect to which there was no liability insurance. They were convicted in the County Court on a de novo appeal from municipal court convictions by reason of the operation of this noninsured ear contrary to N. J. 8. A. 39:6B-2. The County Court imposed a $50 fine on each defendant and suspended the driving privileges of each of them for six months. They appeal from their convictions and sentences.

They first argue that the statute here involved represents an unconstitutional burden on their freedom to travel. We disagree.

The compulsory automobile liability insurance provision, N. J. S. A. 39:6B — 1, and the sanction for noncompliance therewith, N. J. 8. A. 39 :6B — 2, provide that every owner of a motor vehicle registered or principally garaged within the state must carry automobile liability insurance. Failure to have such insurance subjects the owner of the motor vehicle, as well as the operator thereof (who knows or should know of lack of insurance), where it is operated on a highway in this State, to a fine of not less than $50 and the forfeiture of. the right to operate a motor vehicle over the highways of the State for a period of six months from the date of conviction.

The statute does not penalize or burden defendants’ right to interstate travel. It represents an appropriate' exercise of the State’s police power that in no wise contravenes any federal constitutional or other right. Here tire State requires an owner of a dangerous instrumentality such as an automobile, as a condition precedent to the use of the State’s highways, to ensure compensation for damages to others that may be sustained as a result thereof. This requirement is a salutary regulation by the State of its highways to ensure that they are used safely and that others who may be damaged by such use are protected, by spreading the risk of the damage through liability insurance. See Bell v. Burson, 402 U. S. 535, 91 S. Ct. 1586, 29 L. Ed. 2d 90 (1971); Reitz v. Mealey, 314 U. S. 33, 62 S. Ct. 24, 86 L. Ed. 21 (1941); State v. Kabayama, 98 N. J. Super. 85 (App. Div. 1967), aff’d 52 N. J. 507 (1968); Williams v. Sills, 55 N. J. 178 (1969); State v. Smith, 58 N. J. 202 (1971); Howell v. Rosecliff Realty Co., 52 N. J. 313 (1968); Miller v. Anckaitis, 436 F. 2d 115 (3 Cir. 1970); Wright v. Malloy, 373 F. Supp. 1011 (D.C. Vt. 1974).

Defendants also contend that the compulsory insurance law, by forcibly including high risk as well as low risk persons into the insurance market, impermissibly burdens them as low risk persons with inflated insurance premium rates available to them. There are no facts presented supporting either their claim of being low risk insureds or their analysis of the dynamics of the insurance market and premiums resulting therefrom. They further claim a denial of equal protection, charging that low risk insureds and indigents suffer invidious discrimination because rates of insurance premiums are thus encumbered by the compulsory insurance law. Irrespective of whether they have standing, by reason of indigency or being low risk persons, to attack the statute here involved on equal protection grounds, we find the challenge to be without merit.

The promotion of the compelling State interest by this statute, already discussed, disposes of defendants’ claimed deprivation of equal protection. They are not being invidiously discriminated against or treated as a class separate and apart from others. All automobile owners in the State, irrespective of the nature of their risk or economic status, are obliged to buy such insurance for valid and most significant state reasons. See Bell v. Burson, supra; Wright v. Malloy, supra. See and compare Shapiro v. Thompson, 394 U. S. 618, 89 S. Ct. 1322, 22 L. Ed. 2d 600 (1969); Graham v. Richardson, 403 U. S. 365, 91 S. Ct. 1848, 29 L. Ed. 2d 534 (1971).

Defendants argue that it was illegal for the County Court to increase the penalty given in the municipal court. The municipal court imposed a $25 fine, plus $20 court costs, on Mr. McCourt, and a $10 fine, plus $10 costs, on Mrs. McCourt. In the County Court the respective fines were increased to $50 and defendants’ driving privileges were suspended for six months.

It is true that normally the imposition of harsher sentences on appeal to the County Court is not permitted. State v. De Bonis, 58 N. J. 182 (1971). However, defendants have no right to an illegal sentence.

The statute here involved requires that there be a fine of not less than $50 and the forfeiture of the right to operate a motor vehicle for a period of six months. Thus, the initial sentence before the municipal court was beyond its jurisdiction and illegal. The County Court sentence was in accordance with the statute and required by law. The illegal sentence cannot stand. State v. Sheppard, 125 N. J. Super. 332 (App. Div. 1973), eertif. den. 64 N. J. 318 (1973).

Affirmed.

         Reitz v. Mealey, supra, was overruled in part by Perez v. Campbell, 402 U. S. 637, 91 S. Ct. 1704, 29 L. Ed. 2d 233 (1971), but only to the extent that it seemed to validate a state statute requiring payment of a motor vehicle accident tort judgment before driving privileges could be restored, even though the judgment had been discharged in bankruptcy. To that extent the statute was held by Perez to violate the Supremacy Clause and the bankruptcy act. In Perez, however, the court made it clear that it was not concerned with the validity of a limited requirement that a driver post evidence of financial responsibility for the future in order to regain driving privileges or the broader issue of whether a state may require proof of financial responsibility as a precondition for granting driving privileges to anyone.

       We note that at least as to Mr. McCourt the contention that he is a low risk person is somewhat tenuous. As we read the record, he was involved in an accident, a speeding violation and a suspension of his license in 1970, a restoration thereof in July 1971, and a suspension again in September 1971. But we do not consider these facts to be critical to our disposition of this case.


text:
    STATE OF NEW JERSEY IN THE INTEREST OF M. H. A JUVENILE.
    Superior Court of New Jersey Appellate Division
    Submitted November 19, 1974 —
    Decided December 12, 1974.

      Before Judges Matthew's, Fbitz and Bottee.

      Mr. Stanley C. Van Ness, Public Defender, attorney for juvenile appellant (Mr. Thomas A. Pavics, Assistant Deputy Public Defender, of counsel and on the brief).

      Mr. William, F. Hyland, Attorney General of New Jersey, attorney for respondent State of New Jersey (Mr. Jeffrey J. Lee, Special Deputy Attorney General, of counsel and on the brief).
   Per Curiam.

In this appeal M. IP., a juvenile, contends that the trial court mistakenly imposed a suspended sentence to “Yardville” and probation as a means of compelling M. H. to enter Highfields, although the court could have sentenced him directly to Highfields under N. J. S. A. 2A:4~37 without a suspended custodial sentence. (N. J. S. A. 2A:4-37 was repealed by L. 1973, c. 306, § 27, as part of the law commonly referred to as the J. I. N. S. (Juveniles in Need of Supervision) law, N. J. S. A. 2A :4-42 eb seq. Its provisions are now found in N. J. S. A. 2A :4-61; but see N. J. S. A. 2A: 4-62.) Appellant asks this court to vacate the “underlying suspended sentence” or to remand for resentencing.

In October 1973 M. II., a 16-year-old juvenile, pleaded guilty to an adjudication of delinquency for the separate acts of being under the influence of alcoholic beverages and hitchhiking. This was part of a plea bargain involving an amendment of two complaints so as to eliminate other charges. In December 1973 M. IT. pleaded guilty to a violation of probation for failing to report regularly to his probation officer. On the same date he was adjudicated delinquent for consuming alcoholic beverages and obstructing a police officer in the performance of his duties. M. H. was sentenced to a term at the Youth Correctional Institution Complex, at Yardville, which sentence was suspended, and probation was imposed conditioned upon his entering and successfully participating in the Highfields residential group center. See N. J. S. A. 30:4-177.33, which authorizes the establishment of facilities for receiving and treating juvenile delinquent probationers, who must “voluntarily submit” to treatment and supervision therein for a period not to exceed four months.

M. H. has a history of offenses beginning at age 13 when he was first placed on probation. The presentence report shows that he has the potential to lead a constructive life, but his behavior reflects problems at home, affected to a large measure by his father’s alcoholism. The judge below-made it clear that, in effect, he was imposing a sentence to Yardville in the event M. H. fails to satisfactorily participate in and complete the Highfields program. Thus, the court said: “You’re either to be in Yardville or Highfield [sic], no other place.” At this point counsel for M. H. urged the judge not to impose a suspended Yardville sentence because he feared that M. H. might be charged with a minor probation violation while at Highfields which would activate the Yardville sentence. He contended that M. H. was a proper candidate for Highfields but not for Yardville.

The trial judge responded that a person “cannot be sent to Highfields unless he’s on a suspended sentence to Yard-ville.” The probation officer on the case concurred in this understanding.

N. J. S. A. 30:4-177.31 expresses the public policy favoring treatment of juvenile delinquents by various means, “without institutional confinement under court commitment procedures.” See N. J. S. A. 3A:4-61 and N. J. S. A. 3A: 4-63 of the J. I. N. S. law. The succeeding sections authorize the establishment of group treatment centers such as High-fields “as alternatives to the correctional institutions.” Disposition Manual For Juvenile Judges, 48 (1972).

The procedure followed by the trial judge here conforms to the recommendation contained in the Disposition Manual For Juvenile Judges, supra. This manual, which is distributed to judges by the Administrative Office of the Courts, states:

A judge wishing to refer a boy to one of the group centers imposes a suspended sentence to the Youth Reception and Correctional Center at Yardville and then places him on probation with one condition being successful completion of the program. This method of sentencing impresses on the boy the fact that the residential group center is the last chance he has to avoid commitment to the institution, and accounts in some measure for the high degree of cooperation which the program elicits from participants, [at 51]

Without imposing and suspending a custodial sentence to Yardville, a judge can place an adjudicated delinquent on probation upon such conditions, such as residential treatment, as Will aid in the rehabilitation of the juvenile. N. J. S. A. 2A:4r-61(c), formerly N. J. S. A. 2A:4-37(a). While the trial judge here mistakenly believed that the only way M. H. could be sent to Highfields was by first imposing a suspended Yardville sentence, the record suggests that the judge felt that a suspended custodial sentence was appropriate in this case, in any event.

In order to facilitate disposition of this matter, we will not vacate the underlying suspended sentence, since the boy’s history persuades us that such disposition as was made here was a proper exercise of the discretion of the trial judge. Appellant has the right, under B. 3 :21-10, to apply for a change in sentence following the decision of this court, so that the trial judge may reconsider his disposition in the light of this opinion. B. 3:21-10, made applicable to the Juvenile and Domestic Relations Court by B. 5:6-1 (a) and (c). The trial judge can also invoke the provisions of B. 3 :21 — 10 and change the sentence on his own initiative if he desires. We imply no suggestion as to whether the sentence should be changed. This is a matter for the discretion of the trial judge.

Affirmed.


author: Halpern, P. J. A. D.

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. JOHN EDWARD McGEE, JR., DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued November 26, 1974 —
    Decided December 12, 1974.

      Before Judges Halpern, Crahay and Ackerman.

      Ms. Randall W. Westreich, Assistant Deputy Public Defender, argued the cause for appellant (Mr. Stanley C. Van Ness, Public Defender of New Jersey, attorney).

      Mr. Peter S. Hamerslag, Deputy Attorney General, argued the cause for respondent (Mr. William F. Hyland, Attorney General of New Jersey, attorney).
   The opinion of the court was delivered by

Halpern, P. J. A. D.

Defendant appeals from a judgment of conviction, following a jury trial, for the unlawful possession of a gun without a permit (N. J. S. A. 2A:151-41) and for bringing a stolen gun into the State (N. J. S. A. 2A :119-9). lie was acquitted by the jury of receiving stolen property. the same gun (V. J. S. A. 2A:139-1).

Defendant’s application for a new trial was denied. He was sentenced to concurrent 3-5-year State Prison terms. The sentences were suspended and he was placed on probation for a period of five years.

The relevant facts can be briefly summarized. At about 1:30 _a.m. on January 31, 1972 State Trooper Richard Gallo, with defendant’s permission, searched defendant’s car and found a loaded .22-caliber Harrington and Richardson revolver, serial number A.G. 45438, beneath the driver’s seat. The gun was turned over to Detective Sergeant John Lintott, a firearms expert. Lintott checked the gun’s serial number against the records of gun sales in New Jersey in an effort to identify it, and when no sale record was found he furnished information to the National Crime Information Center (N.C.I.C.) in Washington, D.C., to ascertain whether the gun in question had been reported as having been stolen. He was advised by someone at the N.C.I.C. terminal that the gun found in defendant’s car answered the description furnished to it by the Baltimore City, Maryland, Police Department on April 15, 1971, and that it had been stolen. Presumably a computer printout was sent by N.C.I.C. to Lintott confirming the oral notification, but it was not produced at the trial and Lintott was permitted to testify to its contents over defendant’s objection. Defendant’s application for a mistrial was denied.

Defendant denied having any knowledge of the gun’s presence in his car. The substance of his explanation for the gun’s presence was that he had brought the ear about a month before the incident in question and had never looked beneath the driver’s seat — implying it could have been there when he acquired the car. In addition, he testified that he had driven from Maryland to- New Jersey with an acquaintance as a passenger who had some luggage with him — again intimating that perhaps his passenger, whom he was unable to locate, had left the gun beneath the seat on exiting the car in Newark.

The dispositive issue presented is whether the information obtained by Lintott from N.C.I.C. was properly admitted into evidence. This issue is crucial because in order to convict defendant for bringing a stolen gun into this State the State had to prove, in addition to knowledge of the gun’s presence and defendant’s possession thereof, that it had been stolen.

The trial judge permitted Lintott’s testimony into evidence primarily upon the theory that

’ Now, on the area of the N.C.I.O., and I have done this deliberately, purposefully, not with talking to the Prosecutor, but, and I may be wrong, I may be wrong, but it seems to me in this day and age with our modern technology we get license look-ups, it comes into Court, and it seems to me that while it is technically hearsay, it’s an incursion into another exception and it’s almost, as X see it, sort of a — a business record or a public record of some sort, with the advent of the N.C.I.C., which I believe went on the line sometime in 1967 or 1968, that this type of a — of an exception in the line of a business record should be permitted as far as admissibility.
Now, as far as what weight is to be given to this type of a — of a read out from the computer check out, that would be for the jury.

It is obvious from what the trial judge said that he felt the data furnished Lintott by N.C.I.C. was trustworthy and, therefore, admissible as a business record under Evid. R. 63(13).

Eor the first time on this appeal the State contends it was admissible under Evid. R. 63(30) which provides:

Rule 63(30). Commercial Publications And The Like.
' .Evidence of a statement of matters of interest to persons engaged in' an occupation contained in a list, register, periodical, or other published compilation is admissible to prove the truth of any relevant matter so stated if the compilation is published for use by persons engaged in that occupation and is generally used and relied upon by them.

It should be noted that Evid. R. 63(30) creates a new exception to the hearsay rule, and is not contained in the Federal Rules. We agree that Evid. R. 63(30), on its face, would appear to permit the type of hearsay here involved to be admitted into evidence because (a) N.C.I.C. is engaged in the occupation of maintaining listed data of stolen guns throughout the country which is of interest and concern to all police authorities in the country; (b) the data is compiled and published for the use by police authorities engaged in the occupation of apprehending criminals involved with stolen guns; (c) the data furnished is used and relied on by police authorities, and (d) the difficulty of obtaining direct testimony as to the preparation of the compiled data outweighs technical objections to its use as evidence. While the manner of the list’s compilation affects only the weight to be accorded the evidence and not its admissibility, the burden of determining whether the offered evidence qualifies as being trustworthy must be decided by the trial judge in the first instance under Evid. R. 8. See Commentary, § 63(30)-2, made in connection with the proposed adoption of Evid. R. 63(30). A strong argument can be made that the data compiled by N.C.I.O. was nothing more than a compilation of reports of stolen guns to be used as investigative tools by the police throughout the country, with no thought in mind that standing alone it could be utilized to furnish substantive proof that a gun had been stolen.

As indicated, the trial judge permitted Lintott’s testimony into evidence on the basis of Evid. R. 63(13). If Evid. R. 63(13) were applicable, his testimony would have been inadmissible because the owner of the gun who originally furnished the information about the theft of the weapon to the Baltimore police was under no duty to make a truthful account of the facts furnished. Fagan v. Newark, 78 N. J, Super. 294, 319 (App. Div. 1963). The same standards in judging trustworthiness of furnished information are applicable to evidence sought to be introduced under Evid. R. 63(30).

We believe the trial judge mistakenly exercised his discretion in finding that the data furnished by N.C.I.C. was sufficiently trustworthy to justify its admission. Accepting Lintott’s expert testimony of how N.C.I.C. functions, we still do not know (a) how and when the information furnished by the owner of the gun was passed on to the Baltimore police; (b) how and who fed the information into the computer; (c) who programmed the computer and how it was done; how the data was retrieved from the computer; the accuracy of those who operated the computer. Most importantly, the printout supporting the proffered evidence was not produced. Under the circumstances existing here, the evidence should not have been admitted. It is worthwhile to restate what a trial judge’s polestar should be in passing on this type of proffered testimony

In a criminal case -where a person’s life or liberty is at stake and guilt must be proved beyond a reasonable doubt, a court should be reluctant to broaden the scope of an exception to the hearsay rule unless the type of statement sought to be admitted carries with it strong and convincing indicia of trustworthiness. Further, this reluctance should be particularly great when the declarant, like Eller-bee, is available and able to testify at the trial. [State v. Taylor, 46 N. J. 316, at p. 332 (1966)]

See, also, the special problems arising from the attempts to use computer printouts under the business records exception to the hearsay rule in McCormick, Evidence, § 306 at 733-734 (1972). It would appear from the record that the owner of the alleged stolen gun resided in Baltimore, Maryland, and was available as a witness, but for some unexplained reason was not produced by the State. Since the only proof presented to show that the gun was stolen was improperly admitted, the conviction of defendant for bringing a stolen gun into the State must be reversed.

In light of our indicated reversal, we have concluded that defendant’s conviction for unlawfully possessing a gun without a permit must also he reversed. We recognize, that in connection with this charge, the State did not have to prove the gun found in defendant’s car to have been stolen. Nevertheless, the jury having heard testimony of a stolen gun and, in fact, having found that defendant unlawfully brought it into this State, the resulting prejudice had a strong tendency to spill over and taint the verdict on the charge of possessing a gun without a permit. Any other conclusion would be highly speculative and unwarranted under the circumstances.

The judgment below is reversed and the matter remanded for a new trial on both charges.

       N.C.X.C. is a government agency which, among other functions, receives reports from police authorities throughout the entire country concerning stolen guns. The information received is fed into a computer. XTpon receipt of inquiries concerning stolen guns from police authorities, the computer will emit a printout which indicates whether a given gun has been reported as stolen, a description of the gun, the date allegedly stolen and the name of the police agency which made the initial report of the theft.


author: Muir, J. S. C.

text:
    STATE OF NEW JERSEY AND BOARD OF PUBLIC UTILITY COMMISSIONERS, PLAINTIFFS, v. EAST SHORES, INC., MRS. E. CONDIT, ROBERT CHEW, JOSEPH WODZIAK, J. ATKINSON, JOSEPHINE BENEDICT, SOUTH ORANGE FEDERAL SAVINGS BANK, A NEW JERSEY CORPORATION, JAMES TIBUS AND WILLIAM DONZIESER, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided October 10, 1974.

      Mr. William F. Hyland, Attorney General, attorney for the plaintiff (Mr. Joseph W. Ferraro, Jr., Deputy Attorney General, of counsel and on the brief).

      Mr. Milford Salny for defendant East Shores, Inc. (Messrs. Salny and Redbord, attorneys).

      Mr. Frederic C. Ritger, Jr., attorney for defendants Josephine Benedict, Yorkwood Savings & Loan Assn and Liberty Federal Savings & Loan Assn.

      Mr. William Donzeiser, III attorney, appearing pro se and for defendant Class of Seasonal Users Without Lakefront Property.

      Mrs. E. Condit appearing pro se and as representative of Class of All Year-Round Residents.

      Mrs. Joseph Wodziak appearing pro se.

   Muir, J. S. C.

The essential proposition presented in this action by amended complaint after appointment of a custodial receiver for the water utility of defendant corporation is whether this court should transfer title to certain corporate assets to the receiver, presently outside his control, for liquidation to provide funds for improvements to the utility to implement a presently unsatisfied Board of Public Utility Commission (PUC) order.

PUC ordered defendant East Shores, Inc. (East Shores) on November 14, 1971, after determining it to be a public utility "within its jurisdiction, to provide potable water to its customers and to institute an engineering study to ascertain what work was required to render “safe, adequate, and proper water service,” and then, after PUC approval, to proceed and complete such work. The failure of East Shores to comply precipitated this action, which initially constituted an order to specifically pérform the PUC order and ultimately resulted on July 12, 1972 in Edward Saputa, president and principal stockholder of East Shores, signing a consent order appointing John H. Dorsey as receiver “to take charge of the property relating to the water operations [to] complete the required construction as ordered by the Public Utilities Commission * * * until the Court is satisfied that the public is receiving potable water and being provided with safe, adequate and proper service * * * thereafter [with] approval by the court, to return the said assets of the company to the Defendant.”

The consent order also provided, that defendant, through its president, was to continue operating the utility under the receiver’s supervision, and upon failure to do so the receiver or the PUC “shall make application * * * for [a] receivership of all the assets of Defendant Corporation * * East Shores was restrained from divesting itself of its non-water utility-related assets.

Upon the failure of East Shores to continue operation of the water utility and due to the absence of funds to undertake an engineering study, the State applied to amend its complaint to have the other assets of East Shores, consisting essentially of vacant real estate, turned over to the receiver to be sold, with the proceeds being utilized for improvements to the water utility. The application resulted in the inclusion of additional defendants under B. 4:32, necessitated by the facts that certain, lands of East Shores are burdened with deed-covenanted rights of adjoining landowners for recreation and related uses and the refusal of certain landowners to pay the receiver a PUC-established tariff for water use which exceeded deed-covenanted amounts.

The facts are essentially uncontroverted. East Shores, under the aegis of Julius Benedict, its principal stockholder, commenced in the 1940s a subdivision of substantial lands located on the east shore of Lake Hopatcong. A map was prepared, with at least one section being filed in the Morris County Clerk’s Office, and lots were then sold using, in most instances, the map as a reference. The deeds of conveyance contained the following covenant :

The [grantee (s) ] shall automatically become menber [sic] of the Community Club, which shall entitle [them] to the uses and privileges pertinent thereto, said privileges are as follows: Use of the Club House as and when built, beaches, docks, roads, rights of ways to shore front and beach, water for drinking and household use, provided however that the [grantee(s)] shall pay to [East Shores], its successors and assigns, the sum of [various amounts set forth] for the privilege of tapping the water line and a charge yearly, payable on or before the first day of June of each year for community dues. It is understood and agreed that the membership and all privileges pertinent thereto, shall terminate upon change of ownership of the above mentioned premises or upon failure to pay community dues when due.

Some deeds contained the additional provisions:

Community dues not to exceed $50.00 [sic] yearly. The [grantees] as members of the Community Club have the exclusive use of the water front in front of [their] lot for the purpose of bathing, boating and recreation, also have the privilege of erecting a solid boat dock not to extend more than 15 feet into the waters of the Lake in front of their lot, 8 feet from the side line. If [grantees] sell to person or persons acceptable to the Community or to [East Shores] in that event transfer of Community privileges will be made by East Shores, Inc. its successors and assigns.

Each deed contained a provision that East Shores, “its súc-cessors and assigns reserved a right and easement to eon-tract, lay and maintain water pipes and control water supply therein on, under and across the premises conveyed.”

The map of the East Shores subdivision designated beach areas with docks and proposed docks, as well as strips of land called “reserve” that are rights of ways to the beach areas from roadways. It also showed a parcel of land to be used for a clubhouse which has never been built.

As the lots were sold off the water supply system developed. Initially, water was supplied from two wells that were interconnected. The wells were abandoned in 1958 due to high iron content and lack of yield, and infiltration beds were installed in Lake Hopatcong. A pumping, treatment and storage system, later discussed, was also installed. The distribution mains and lines were installed across various lots. None was installed in street beds except where crossing from one section of the development to the other was required.

During the 1950s and early 1960s there are no recorded problems with the water system. In 1964 Julius Benedict’s widow sold the entire stock of East Shores to Edward Saputa. As part of the transaction a mortgage was given to Josephine Benedict by Ease Shores in the amount of $36,384.35. The amount, priority and security of that lien are not in issue at this time.

By the late 1960s East Shores had approximately 260 water customers. (Records of the receiver presently show 284 household connections.) Some of the customers were year-round residents while others were just summer residents.

Subsequent to the change in ownership of East Shores problems arose with the quality and distribution of the water. In 1966 the State Board of Health found polluted, contaminated water being distributed by East Shores and ordered improvements made and ihe “ceasing of distribution of polluted water by July 1, 1966.” East Shores failed to make adequate improvements, leading to a hearing before the PTJC and the subsequent order of November 4, 1971.

At the time of the receiver’s appointment there was a local board of health order for customers to boil water before use. The proofs did not indicate clearly whether this order is still in effect but the receiver indicated chlorination makes the water potable now.

Erom the outset the receiver experienced financial difficulties. Money had to be borrowed to pay the back salary of the state-licensed operator of the system. Some customers did not pay their annual dues. The receiver applied to and received from the PUC the authority to charge $100 a year to year-round customers and $45 for summer customers. He is still experiencing collection difficulties and has a substantial number of complaints pending in the Morris County District Court awaiting the outcome of this action. With the funds he borrowed and collected he has been able to maintain the system but does not have sufficient funds to hire an engineer to commence a study as required by the PUC order. He testified it costs about $1,000 a month to maintain and operate the system, without consideration being given to major repairs or renovations. An interim accounting filed with the court shows an on-hand balance of approximately $5,600 which the receiver says is less than is required just to meet the maintenance and operating costs. He testified that emergent problems, such as broken water lines that result from the antiquated nature of the system (as found by the PUC in November 1971), cannot adequately be handled with the present income.

It is parenthetically noted that efforts were made through negotiations to have the water system taken over by Jefferson Township, but this was defeated at a public referendum.

Defendant did not, under the receiver’s supervision, operate the system as the court’s July 12, 1972 order provided, but the receiver carried on the operation alone.

The general description of the system was offered through testimony of a Department of Environmental Protection (DEP) representative, the licensed water operator of the East Shores system, the receiver and an engineer experienced in the design and construction of water supply and distribution systems, who surveyed it. The combined testimony described a system with inadequate treatment facilities, inadequate pumping facilities, inadequate storage facilities, and an inadequate distribution system essentially due to the age and undersized capacity and lack of maintenance and upkeep. The “Topsylike” growth of the utility and absence of any substantive records on the location of distribution lines also contribute to the inadequacies. (A map showing distribution lines was marked into evidence but it lacks any reliable engineering information.)

The engineer, utilizing company records, indicated that the sytem supplied approximately 1100 people; the average annual daily water production is 150,000 gallons a day, with summer-month daily production being 230,000 gallons. Relying upon the potable Water .Standards and the Rules and Regulations for the Approval of Public Water Supply Systems and Water Treatment Plants of JDEP, the engineer estimated the cost of improvements required to meet the PEC order would be $433,000. The breakdown of the total figure is:

(a) Treatment .$ 80,000
(b) Pumping equipment 16,250
(e) Distribution system 141,750
(d) Storage 89,500

with the remainder for contingency, legal and engineering expenses. He testified the work could be done in phases, with treatment, pumping and storage being done immediately and the distribution system left to a capital improvement plan over a number of years. The figures presented were noted to be subject to inflation.

The tax assessor of Jefferson Township testified on the value of all the land owned by East Shores. He indicated that as of the most recent township-wide revaluation by a professional revaluation firm, which was completed in 1973 and went into effect on January 1, 1974, the total value of all East Shores lands is $315,400. This land includes beach front, submerged land, separate lots that do not conform to local zoning standards, acreage parcels and lands devoted to water utility purposes. If the water utility lands and recrea^ tionally-devoted lands are excluded, the total assessed value is $280,700. This figure represents the price, as determined by the revaluation study, the lands would sell for at a fair and bona fide sale by private contract. N. J. S. A. 54:4r-23. It indicates the market value of the lands in their present condition. In re Appeal of East Orange, 80 N. J. Super. 219, 231 (App. Div. 1963).

The specific issues to be resolved by the court are:

1. The authority of the court to transfer nonwater utility related assets of East Shores to the receiver for liquidation, to provide funds for the purpose of working toward compliance with the PUO order;
2. Whether the receiver, if the lands are transferred to him for sale, can sell the dedicated lands free and clear of the rights of the East Shores’ grantees or their succsesors in title;
3. Whether the deed covenants to supply water and recreational facilities for a prescribed dollar amount are enforceable by the property owners ;
4. Whether the matter should be remanded to the PUO to consider modification of its order for reconsideration since the value of the assets proposed for transfer fall short of the funds necessary to comply with the order.

It is the opinion of the court, for reasons hereafter stated, that

(1) all the remaining assets of the corporation be turned over to the receiver for liquidation except those lands encumbered by rights of East Shores’ grantees and their successors in title, which shall be turned over and held as hereinafter set forth;

(2) the receiver is authorized to sell, subject to court approval, the unencumbered lands free and clear of all liens, paying only the outstanding taxes (the validity and amount of the Benedict mortgage to be determined at a subsequent proceeding);

(3) the receiver shall make application to the PUC for such modification of its order as is required to allow him the time needed to improve the water supply and distribu-lion system of East Shores or such other alternative relief the PUC shall determine;

(4) the receiver shall collect and the water users are directed to pay the charges established by the PUC for water use;

(5) the receiver shall continue to operate and maintain, the water supply and distribution system of East Shores in the manner prescribed by the July 12, 1972 order of this court, and shall further maintain, operate and manage the recreational facilties of the East Shores Company, with full power to sue for, collect and receive revenues, borrow funds and do all things required in the proper management of the facilities, including setting a reasonable annual user’s fee in accordance with the guidelines hereinafter set forth, and the users shall pay such fees or be subject to loss of privilege to use the facilities as set out in the deed covenants;

(6) upon compliance with the PUC order or such modified order as it may issue, with court approval and on notice to all parties, the receiver may return the assets of the company to defendant East Shores.

N. J. S. A. 48 :2-41 enhances the PUC with the authority to move in a court of equity for specific performance of its orders. It does not anticipate noncompliance after a court’s direction to the utility to perform. If makes no provision for appointment of a receiver to assure compliance. The receivership created by this court in July 1972 dealt with the failu re to comply. It is a receivership custodial in nature and based upon inherent equity jurisdiction without reference to any statutory authority. The power of a custodial receiver is in sharp contrast to that of his statutory counterpart. The latter is appointed to protect shareholders and creditors on specific ground such as insolvency, and acquires legal title to corporate assets with the power to liquidate the assets and dissolve the corporation. N. J. 8. A. 14A :14-2, 4, 5. A custodial receiver is appointed to preserve the corporate assets for a prescribed period, usually pending the litigation, and acquires no legal title and is devoid of the power to liquidate and dissolve. Query: Can the custodial receiver here be vested with legal title? There are reasons why he can and should be:

First: The object of transferring title is to ultimately provide funds to rehabilitate the water system. In so doing, he is in effect preserving an essential corporate asset which is consonant with the historical aims of appointing a custodial receiver.

Second: East Shores began as a single entity with a single purpose — the sale of lands. As part of the sales program, the providing of water became a sales feature. In reliance East Shores’ grantees purchased lands and built homes, many for year-round use, and are now confronted by a situation, if this court cannot grant relief, of being without a water supply essential to their daily health and welfare. The water operation was inextricably involved with all the corporate assets and should remain so.

The slavish adherence to- a legal precedent that denies a custodial receiver legal title to corporate assets would be manifestly unjust. Equity does not have to be bound to precedent under these circumstances. As Justice Heher indicated in Sears, Roebuck & Co. v. Camp, 124 N. J. Eq. 403 (E. & A. 1938) :

Equitable remedies “are distinguished for their flexibility, their unlimited variety, their adaptability to circumstances, and the natural rules which govern their use. There is in fact no limit to their variety and application; the court of equity has the power of devising its remedy and shaping it to fit the changing circumstances of every case and the complex relations of all the parties.” Pom. Eg. Jur. § 109. [at 411]

Third: While we are not dealing with a statutory receiver!, it is noteworthy that one can be appointed when a corporation is insolvent. N. J. S. A. 14A:lA-2. The testimony of the receiver here indicates he has inadequate capital to compfy with the order of the PUG. The remaining land of the corporation could not be mortgaged or otherwise hypothecated to raise sufficient capital since its total value is substantially less than needed to comply with the PU C order. A corporation is insolvent when the aggregate of its property is not, at a fair valuation, sufficient to pay its debts or when it is unable to pay its debts by the honest use of credit. N. J. 8. A. 14A:14-l(f). An equitable debt of East Shores here is its obligation to provide a safe, adequate potable water supply to its users. It is unable to do so under existing circumstances. It is, therefore, equitably insolvent. The corporation cannot he liquidated. The alternative is to sell the remaining assets, with ultimate aim toward total rehabilitation of the water system. This is the equitable remedy that fits the circumstances.

Fourth: The consent order anticipated this transfer. Defendant has not operated the water company, but left it to the receiver. It cannot now complain.

The extent of the land of East Shores transferred to the receiver for liquidation must be limited to lands free and clear of the rights held by East Shores’ grantees. East Shores made conveyances containing covenants providing the grantees, upon the condition they pay the annual community dues, with the use of beaches, docks, roads and rights of ways to shore and beach. The conveyances were made with reference, in most instances, to the map of the East Shores subdivision. The conveyance of lots by reference to a map upon which streets, rights of way, beaches and docks are laid out impliedly creates private rights in those streets, rights of way, beaches and docks shown. See Clark v. Elizabeth, 40 N. J. L. 172, 174 (E. & A. 1878); State v. Birch, 115 N. J. Super. 457, 464 (App. Div. 1971); Cunningham and Tischler, “Dedication of Land in New Jersey,” 15 Rutgers L. Rev. 377, 404 (1961). Once these rights are created, they cannot be destroyed unless just compensation is paid. See 15 Rutgers L. Rev. at 405; Mueller v. N. J. Highway Authority, 59 N. J. Super. 583, 589 (App. Div. 1960). The receiver is in no position to buy out the rights. The sale of the lands burdened with these rights, when considering their limited value, is not reasonable at this time.

The private rights are, it is recognized, subject to being extinguished under the deed covenants for nonpayment of community dues or transfer of title. There is no proof before the court sufficient to justify a determination that the rights can be extinguished, and even in the event several property owners could have their rights extinguished, those of the remaining owners would continue. It is noted, however, that the clubhouse was never constructed and therefore no rights established in the land assigned on the map for the clubhouse. It can be sold by the receiver, as can submerged lands, but only to those who have rights therein.

The original deeds combined the cost for water and recreational use as one amount. The water use rate is now established. A determination of the charge for other services must be made. Again, the amounts of $50 set forth in most deeds may be unrealistic in light of present-day inflation and the cost of operating such facilities. The parties to the deeds at the time of original conveyances believed the $50 amount adequate to cover the named services — apparently in perpetuity. This was a mutually mistaken belief that required a reformation or modification to meet present-day standards. Under present-day standards, the fee set may not be reasonable. An analysis of costs and expenses will have to be made to decide what a reasonable fee is. The fee will have to bear a reasonable relationship to the costs incurred. The receiver is directed to ascertain all maintenance, operating and related expenses and the need for capital improvements, and then to set a fee that will render the recreational facilities self-sustaining.

Defendant East Shores suggests the matter be remanded to PUC without court action because the funds which the sale of land will produce are inadequate to rehabilitate the water system in accordance with the November 1971 order. Initially it must be said that immediate efforts to comply in 1971 might have avoided this inadequacy. The suggestion, however, flies in the face of reason. Since 1966 the water system customers have been confronted with a faulty, defective supply and distribution system. A partial resolution is at hand and the court cannot turn its back. Clearly, some modification of the order is necessary, but this can be done with PUG in full command of all the facts and this Court’s determination and after the receiver has determined the funds available.


author: Thuring, J. S. C.

text:
    JULIA R. MADARAS, ADMINISTRATRIX AD PROSEQUENDUM AND GENERAL ADMINISTRATRIX OF THE ESTATE OF JOHN J. MADARAS, DECEASED, AND JULIA R. MADARAS, INDIVIDUALLY, AND PETER DE NICOLA AND ROSEMARIE DE NICOLA, PLAINTIFFS, v. ELSIE CHINIGO, ADMINISTRATRIX OF THE ESTATE OF ANDREW N. CHINIGO, CESAR GONZALEZ AND BARBARA GONZALEZ, INDIVIDUALLY AND T/A CEBARB TRUCKING AND LEASING CO., AND ONTERO GONZALEZ, DEFENDANTS. ELSIE CHINIGO, ADMINISTRATRIX AD PROSEQUENDUM OF THE ESTATE OF ANDREW CHINIGO, DECEASED, PLAINTIFF, v. CESAR GONZALEZ AND BARBARA GONZALEZ, INDIVIDUALLY AND T/A CEBARB TRUCKING AND LEASING CO., AND ONTERO GONZALEZ, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided June 5, 1974.

      Mr. Abraham S. Bernstein for plaintiffs in the Madaras case (Messrs. Barr, Kaplus & Friedland, attorneys).

      Mr. Donald F. Stevens for defendant Chinigo in the Madaras case (Messrs. Chasan, Leyner, Holland & Tarrant, attorneys) .
   Thuring, J. S. C.

This is a motion on behalf of plaintiffs Julia R. Madaras, administratrix ad prosequendum and general administratrix of the estate of John J. Madaras, deceased, Julia R. Madaras individually, and Peter De Nicola and Rosemarie De Nicola {per quod) against defendant Elsie Chinigo, administratrix of the estate of Andrew N. Chinigo.

Plaintiffs move to strike tire third separate defense of the amended answer of defendant Elsie Chinigo who contends that a coeniployee relationship existed between plaintiff Peter De Nicola, plaintiff’s decedent Madaras and Andrew N. Chinigo at the time of the accident. All were occupants of a vehicle driven by Andrew N. Chinigo at a time when Chini-go’s vehicle was in a collision with a truck on the New Jersey Turnpike. The accident occurred on April 11, 1973 while they were on their way home from work. Plaintiffs contend that there was no coemployee relationship existent at the time of the accident.

John Madaras, Peter De Nicola and Andrew N. Chinigo were all employed by Mundt Perforations Inc. at its South Plainfield plant on the date of the accident. When the company planned to move its operation from Jersey City to South Plainfield it agreed to pay $3.50 a week as a travel allowance to each employee for a three-month period after the employee commenced work at the South Plainfield plant. The employer also agreed to pay up to $200 as a moving cost allowance to the employees who chose to move to the new plant’s area. Prior to the move a contract was entered into between the employees, the union and the company relative to a new pay schedule. Such added benefits were received by all employees, i.e., former Jersey City emplojrees and those employees joining Mundt’s operation for the first time in South Plainfield, New Jersey.

De Nicola’s travel allowance ended March. 11, 1973, one month prior to the accident. Madaras was to receive his final weekly travel allowance for the week ending April 15, four days after the accident.

Plaintiffs rely upon Ricciardi v. Aniero Concrete Co., Inc., 64 N. J. 60 (1973). That ease held that the employer-employee relationship continues when an employee is going to or coming from work, provided the employer reimburses the employee for all or substantially all of the total travel expenses involved. It also held that where an employee is reimbursed for only 40% of his traveling expenses, then the employee is not entitled to workmen’s compensation benefits for injuries sustained while going to or returning from work.

Defendant Chinigo answers that the facts spell out an exception to the going-and-coming rule generally prevailing in workmen’s compensation situations, in that plaintiffs were injured in an accident arising out of and in the course of employment, barring suit against a eoemployee. Defendant Chi-nigo relies upon the arrangements entered into between the work force of the company, the employer and the union in an attempt to spell out a benefit flowing to the employer-employee relationship. Defendant in effect says that the circumstances present evidence that the trip on the fatal day served a purpose reasonably incidental to the duties of the employees injured and their employment, thus making the accident arising out of and in the course of employment, precluding the suit by plaintiffs.

At the outset we recognize that there must exist a mutual benefit to both the employer and employee to bring the act remote to the employment within the scope of the employment. Thering v. Reinkemeyer, 117 N. J. Super. 176 (Law Div. 1971).

Defendant Chinigo relies heavily on Williams v. Remco Industries, 118 N. J. Super. 481 (App. Div. 1972), certif. den. 61 N. J. 163 (1972), to support her position. The court finds that case distinguishable. In Williams an employer-employee relationship was established on the ground that the employer had supplied his employees daily with bus service, and plaintiff was injured while aboard a bus returning from work. There the court found that the arrangement was serving an incidental and beneficial interest to the employer at the time of the injury. It is interesting to note that the court further concluded that “[t]he transportation arrangement, under the existing circumstances, inured to their joint benefit making petitioner’s injuries compensable” (at 484; emphasis supplied) .

The clearly distinguishing factor between Williams and the instant ease is that here no joint or mutual benefit flowed from the employees’ car pooling arrangement. The employer in Williams provided the total benefit to the employee, i.e., the daily bus service. The court here find? that the transportation arrangement entered into freely between the coemployees did not have its origin in any arrangement with the employer. Additionally, the court feels that the ease of Ricciardi, supra, is clearly on point. It is stipulated that the travel arrangements of the employees in this case represented a weekly travel aggregate of 300 miles. The court takes judicial notice that 11^ a mile is considered an average proper reimbursement for the utilization of a car, and simple arithmetic tells us that 300 miles times 11^ equals $33 in cost for travel a week per employee where he is using his own vehicle. It is uncontroverted that Peter De Nicola’s allowance of $3.50 had been terminated prior to the accident. With respect to employee Madaras, his temporary travel allowance of $3.50 a week certainly falls far short of our Supreme Court’s mandate that the employer must reimburse the employee for all or substantially all of the travel expenses involved.

. Eurther, the court does not accept the position of defendant Chinigo in her attempt to spell out a benefit to the employees on the ground that there was little done by the employer to recruit other employees in the area of its relocation, thus evidencing the employer’s concern for the retention of its Jersey City plant employees. The employer also points to what it contends were employée beneficial contract wage changes made in consideration of its Jersey City employees’ continuation of emplojment at the new location. Depositions submitted to the court indicate that extensive employee recruiting was done by the employer in the South Plainfield area through newspapers, word of mouth and the services of the New Jersey State Employment Agency.

Plaintiffs respond to the employer’s contentions that the wage rate change was a benefit to the employees by showing that all employees of Mundt, whether they be those formerly employed at the Jersey City plant or those later hired for employment at the South Plainfield plant under the contract entered into between the union and Mundt, received the same pay for the same type employment.

It is clear that this does not evidence any special benefit to the employees injured in the accident of April 11, 1973 who had previously worked in Jersey City. Defendant’s reliance on the renegotiation of the contract as a benefit to the plaintiffs and the alleged transfer of the Jersey City employees as a benefit to the employer is unfounded.

In Orsinie v. Torrance, 96 Conn. 352, 113 A. 924 (Sup. Ct. Err. 1921), a contract of employment which included a provision requiring the employer to either furnish to its employees transportation to and from work or to add the cost of transportation to the prevailing daily wage of the employees was held not to establish an employer-employee relationship during the time the employees traveled to and from work. The court found that the employees were not obligated to use the mode of transportation, i.e., the trolley for which the travel allowance was made, but could choose to walk or ride in another’s vehicle. The court distinguished Swanson v. Latham & Crane, 92 Conn. 87, 101 A. 492 (Sup. Ct. Err. 1917), which held that where the employer furnished the transportation as part of the contract of employment and the injury arose out of the hazard of the furnished transportation, an employer-employee relationship existed at the time of the accident.

The court finds that there was no firm reliance on the part of the employer for its continued operation based upon the continuation of its Jersey City employees to the extent defendant would assert. Additionally, the court fails to find any substantial benefit flowing to plaintiffs by virtue of the transfer of the employer’s business. It seems more likely that it became an added burden rather than a benefit to the injured employees to travel 300 miles a week. Added to that is the fact that the company’s meager allowance toward travel expenses, if any, was greatly below the standard relied upon in Ricciardi, supra.

The court finds that no employer-employee relationship existed at the time of the accident in question. The motion will be granted striking the third separate defense of Elsie Chi-nigo.


author: Miller, J. C. C.,

text:
    DAVID CANCEL AND NIRSA CANCEL, PLAINTIFFS, v. RICHARD WATSON, DEFENDANT AND THIRD-PARTY PLAINTIFF, v. CITIZENS STATE BANK AND LICEO CUBANO, THIRD-PARTY DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided November 19, 1974.

      Mr. Darrell Fineman for plaintiffs (Messrs. Kavesh & Basile, attorneys).

      Mr. Franklin J. Riesenburger for defendant and third-party plaintiff (Messrs. Greenblatt & Greenblatt, attorneys).

      Mr. Thomas M. Falkowski for third-party defendant Citizens State Bank (Messrs. Gurry & Conlan, attorneys).

      Mr. John Himmelberger, Jr. for third-party defendant Liceo Cubano (Messrs. Horn, Weinstein & Kaplan, attorneys).
   Miller, J. C. C.,

Temporarily Assigned. Defendant third-party plaintiff in this personal injury case has moved for a rehearing on the question of whether the governmental agencies here involved may be joined as third-party defendants. A prior motion by defendant to serve notice upon the governmental agencies under the New Jersey Tort Claims Act of 1972, N. J. 8. A. 59 :1-1 et seq., was denied on the ground that such third-party practice should not be permitted under that act. The court is now asked to reconsider this conclusion in light of Markey v. Scog, 129 N. J. Super. 192 (Law Div. 1974).

In Markey v. Scog the court was faced with a similar issue to that presented in this case. The court concluded that the right of a nonpublic defendant to seek contribution from a public entity as a joint tortfeasor depended in that case upon the claim and presentation requirements of N. J. S. A. 59:8-8. Here the question is broader and it is the opinion of this court that while notice under N. J. S. A. 59:8-8 is, of course, important, the primary question is not so much compliance with the notice provisions, but whether the claims may be joined at all. For the reasons set forth hereafter, it is determined that joinder should not be permitted.

In the instant ease a “slow pitch” softball game took place on June 11, 1973 at Landis Park, Vineland, in which defendant Watson was a participant. During this game it is alleged Watson hurled or caused to be hurled a baseball bat through the air, striking plaintiff. The complaint was filed .against defendant Watson in November 1973. This court in January 1974 granted defendant’s motion to serve third-party complaints against the YMCA of the City of Vineland, the Citizens State Bank and the Liceo Cubano, the thrust of these complaints being failure of supervision and control. However, motions to join the City of Vineland and the Vine-land Recreation 'Commission on similar grounds were denied as improper under the Tort Claims Act of 1972. The defendant now seeks rehearing on the following question:

May the party defendant in a personal injury action file a third-party complaint for indemnification and contribution against a public entity where the party plaintiff has failed to present a claim against such public entity directly under N. J. 8. A. 59:8-8. For the reasons enunciated herein, the answer is in the negative. At the outset the court notes that joinder should be denied in the instant case for the simple reason that the statute specifically denies liability in this type of factual situation, N. J. S. A. 59 :3-ll; 59 :2-2(b).

The New Jersey Tort Claims Act of 1972, N. J. 8. A. 59:1 — 1 et seq., was an attempt by the Legislature to balance the inequities perpetrated through the application of sovereign immunity with the severe economic burden which total abrogation of that doctrine would impose upon public entities. Having struck what it felt to be the appropriate balance, the Legislature declared that

* * * public entities shall only be liable for their negligence within the limitations of this act and in accordance with the fair and uniform principles established herein. N. J. S. A. 59:1-2. [Emphasis added‘|

The act, therefore, reestablished the sovereign immunity doctrine, following the decision of the Supreme Court in Willis v. Dept. of Conservation and Economic Development, 55 N. J. 534 (1970), subject only to the provisions of the act. See Report of the Attorney General’s Task Force on Sovereign Immunity 10 (May 1972).

The procedure for the commencement and prosecution of claims against public entities is set forth in chapters 8 and 9 of the act. In light of the legislative declaration set forth in chapter 1 and quoted above, these procedures must be considered as all-inclusive. The statute does recognize that a public entity may be a joint tortfeasor and limits the extent of recovery allowable against such a public entity in N. J. 8. A. 59 :9 — 3. However, nowhere in the act is the commencement of third-party proceedings against a public entity exempted from the general procedures set forth therein. It therefore appears that a party defendant may not join a public entity as a third-party defendant unless the party plaintiff has acted affirmatively against the public entity under N. J. 8. A. 59:8-8.

In addition to this negative inference, it is clear that the Legislature intended to discourage the joinder of public entities as third-party defendants. Under the act the addition of a public entity as a third-party defendant is made to create significantly greater complications than those normally associated with the addition of third parties. Initially, N. J. 8. A. 59:9-l provides that all tort claims brought against a public entity under this act shall be tried by a judge sitting without a jury. Yet, a plaintiff in other tort actions has an absolute right to demand a jury trial. N. J. Const. (1947), Art. I, par. 9. Thus, the Legislature must have felt that it was for the plaintiff alone to decide whether, in any given case, his right to a jury trial as to all issues outweighs the possibility of obtaining a judgment against the public entity in some sort of bifurcated proceeding, because only the plaintiff is given the power to serve notice upon the public entity. N. J. 8. A. 59 :8-8.

A second complicating factor is created by the Legislature’s choice of the so-called “Mississippi rule” of comparative negligence in N. J. 8. A. 59:9-4 for tort actions against public entities. This rule is in conflict with the Wisconsin rule of comparative negligence selected by the Legislature to govern in tort actions against private entities, N. J. 8. A. 2A: 15-5.1. The incompatability of these two rules, especially in light of the fact that they were enacted within a year of each other, can only be construed as indicating a legislative bias against joinder of tort claims against public and private entities. Only where a party plaintiff- 'affirmatively assumes the risk of so complicating his proceeding by direct action against the public entity under N. J. S. A. 59:8~8 will the burdens of such complications be imposed upon him.

Further manifestations of the Legislature’s bias against joinder of public entities in otherwise private litigation appear in the provisions of N. J. 8. A. 59:9-2. Under this section the Legislature proscribes recovery based on strict liability, implied warranty or products liability, recovery of punitive damages and, with specified limitations, recovery of damages for pain and suffering. Also subrogation by insurers is proscribed. None of these restrictions applies generally to tort actions against private entities, thereby further complicating any action involving both public and private defendants.

It sounds quite simple in theory to join the city as defendant seeks to do. In practice it becomes quite difficult because of the differing standards of negligence and comparative negligence (or contributory negligence if the accident happened before August 22, 1973, the date when N. J. 8. A. 2A:15-5.1 became effective). The jury must determine the facts in one aspect of the case; the judge must determine them in the other. True, B. 4:35-2 permits an advisory jury, but to use one would flout the expressed intent of the Legislature that no jury trials be held in Title 59 cases. Moreover, the jury, if it were the same jury which tried the primary case, must of necessity be charged on two differing concepts of comparative negligence in the same ease, an obvious invitation to error. Further, the trial judge may well either have to hear the case over again or put the parties to the expense of a transcript, since he would be called upon to render a verdict only in the event of a verdict for plaintiff in the primary suit.

It is significant that no original wrongdoing on the part of the city was charged by plaintiff or, indeed, by defendant. A practice has become increasingly frequent over the past few years where governmental agencies have been joined as third-party defendants, particularly in automobile negligence actions whenever the ingenuity of counsel has been able to devise a theory to support such facts as might be gleaned from a given situation. Obviously, the more defendants that can be corralled into a given situation the greater the chance of contribution from each defendant, thus lightening the load upon original defendants. Thus, municipalities have been sought unsuccessfully to be held liable for failure, or alleged failure, to provide supervision in a passive recreation area, Fahey v. Jersey City, 52 N. J. 103 (1968); invalid designation of one-way streets alleged^ causing economic losses to plaintiff, Visidor Corp. v. Cliffside Park, 48 N. J. 214 (1966) ; failure to install a traffic light at an intersection, Hoy v. Capelli, 48 N. J. 81 (1966); failure to timely clear a municipal parking lot of snow, Amelchenko v. Freehold, 42 N. J. 541 (1969), and the negligence of a building inspector, Fiduccia v. Summit Hill Const. Co., 109 N. J. Super. 249 (Cty. D. Ct. 1970); and for damages caused by a valid adoption of a zoning ordinance, Veling v. Ramsey, 94 N. J. Super. 459 (App. Div. 1967), to name but a few cases. The scheme of the statute is designed to discourage this practice. The courts should not nullify the legislative intent unless no other alternative exists. R. 4:8, salutary as it is, is not a device for such frustration. •

It is true that N. J. S. A. 59:9-3 provides for situations where a governmental agency is a joint tortfeasor. The thrust of this section, however, is to regulate the manner of the division of damages between governmental and nongovernmental joint tortfeasors, See 1972 comment to N. J. S. A. 59:9-3. The statute is silent as to the procedure to be invoked to adjudicate whether or not the parties are joint tort-feasors. It may well be that either legislation or a new court rule is required to fill the gap, but in view of the procedural problems set forth herein, joinder of a governmental entity as an additional defendant, particularly as an afterthought, as in this case, would neither solve the problem nor contribute to the administration of justice.

It is the responsibility of the court in construing a statute to determine what the Legislature intended rather than to apply a meaning which merely appears fairer as the particular statute is used in practice. If the statute works inequitably, it is up to the Legislature to correct the difficulty. Matawan v. Monmouth County Tax Bd., 51 N. J. 291, 298 (1968).

The motion of defendant to rehear the question of whether the public entity here involved may be joined is denied.


author: Walsh, Joseph F., P. J. D. C.

text:
    WASHINGTON MOTOR SALES, PLAINTIFF, v. OLWVIOLE FERREIRA, DEFENDANT.
    District Court — Essex County
    November 19, 1974.

      Messrs. Eichler & Forgosh, attorneys for plaintiff Washington Motor Sales (Mr. Fred Garodnik appearing).

      Newark Legal Services, attorney for defendant Olwviole Ferreira (Alan S. Ziegler appearing).
   Walsh, Joseph F., P. J. D. C.

Recovery is sought of monies due and owing on a claimed deficiency to a plaintiff who is a new and used automobile dealer, after a default, by defendant on a retail installment contract for his purchase of a used automobile. Defendant seeks a setoff under the Eederal Truth in Lending Act.

On or about June 7, 1973 defendant agreed to purchase a used automobile at a price of $1,848. At the request of defendant, plaintiff provided an application for financing with the Eirst National State Bank of New Jersey which was completed and filed, with the required information supplied by defendant.

On or about June 15 defendant delivered an additional deposit of $500 and completed the transaction with the agent for plaintiff. Defendant was presented with, and had explained to him, a document entitled “Retail Installment Contract-Security Agreement and Disclosure Statement,” which, in addition to the usual terms contained therein, further advised as to the amount of the monthly payments, the date due and place for payments, and penalties for late payments. Terms of optional credit life, accident and health insurance were also explained to defendant and he signed his acceptance of the insurance although the signature was not dated.

After signing the contract defendant was given a copy which was identical to the original except that the reverse side of the buyer’s copy did not include a section which was entitled “ASSIGNEE AND SELLER’S WARRANTIES.” This is a contract of assignment between the seller and the bank and in no manner is made obligatory upon the buyer.

Thereafter a default occurred and recovery is sought on the deficiency resulting after public sale of the repossessed automobile.

Defendant contends that the contract is violative of the Consumer Credit Protection Act’s subchapter entitled “Truth in Lending Act,” 15 U.S.C.A. § 1601 et seq., and “Regulation Z” enacted thereunder by the Federal Reserve Board, 12 C.F.R. 226.1 et seq.

The specific violations alleged are: (1) failure to make required disclosures before signing of the document; (2) nondisclosure of the assignee of the contract; (3) lack of date on the separate credit insurance authorization; (4) failure to make sequential and meaningful disclosure of the acceleration clause in the body of the contract at a place prior to or adjacent the signatures.

A setoff in double the amount of the charges is claimed under the statute, 15 U.S.C.A. § 1640(a).

The law of New Jersey is devoid of any case dispositive of the problem. Both sides agree that the Truth in Lending Act and the federal regulations issued thereunder cover the situation: N. J. S. A. 17:3B-2 provides:

When under any law of this State, a civil action is expressly provided for any act or failure to act which constitutes a violation of any provision of such law, and such act or failure to act also constitutes a violation of the Truth in Lending Act, Title I of the Consumer Credit Protection Act (Public Law 90-321, 82 Stat. 146) for which a civil action may he brought under the provisions of the Truth in Lending Act, the provisions of the Truth in Lending Act shall supersede the provisions of State law when the penalty for violation of the Truth in Lending Act is more severe than the penalty for violation of the State law, to the end that only one recovery may be had for such act or failure to act.

This court is satisfied as a matter of fact from the testimony taken in this matter that defendant was presented with the retail installment contract and, before he signed it, the contents were fully disclosed to him. In no way was there a violation of “Regulation Z,” 12 C.F.R. 226.8, enacted under the provisions of 15 U.S.C.A. § 1604, requiring specific disclosures to be made in this type of consumer sale.

This court further finds there is no obligation on the part of the seller under 15 U.S.C.A. § 1638 or 12 C.E.R. 226.8 (a) (i) to locate on the face of the retail installment contract, above or adjacent to the signatures, the terms of an acceleration clause found as a “Provision” on the back of the document which states that as a consequence of default “the seller may declare the unpaid balance of the contract immediately due and payable * * This provision is fully covered and incorporated by notice on the front of the instrument: “SUBJECT TO THE TERMS AND CONDITIONS STIPULATED HEREIN AND IN THE ‘PROVISIONS’ SET FORTH ON THE OTHER SIDE HEREOF AND MADE PART HEREOF.”

The disclosures which are required for credit sales, such as the one involved herein, set forth in 15 U.S.C.A. § 1638, read in part as follows:

§1638. Sales not under open end credit plans —■ Required disclosures by creditor
(a) In connection with each consumer credit sale not under an open end credit plan, the creditor shall disclose each of the following items which is applicable :
(1) The cash price of the property or service purchased.
(2) The sum of any amounts credited as downpayment (including any trade-in).
(3) The difference between the amount referred to in paragraph
(1) and the amount referred to in paragraph (2).
(4) All other charges, individually itemized, which are included in the amount of the credit extended but which are not part of the finance charge.
(5) The total amount to be financed (the sum of the amount described in paragraph (3) plus the amount described in paragraph (ll-
fG) Except in the case of a sale of a dwelling, the amount of the finance charge, which may in whole or in part be designated as a time-price differential or any similar term to the extent applicable.
(7) The finance charge expressed as an annual percentage rate except in the case of a finance charge
(A) which does not exceed $5 and is applicable to an amount financed not exceeding $75, or
(15) which does not exceed $7.50 and is applicable to an amount financed exceeding $75.
A creditor may not divide a consumer credit sale into two or more sales to avoid the disclosure of an annual percentage rate pursuant to this paragraph.
(8) The number, amount, and due dates or periods of payments scheduled to repay the indebtedness.
(9) The default, delinquency, or similar charges payable in the event of late payments.
(10) A description of any security interest held or to be retained or acquired by the creditor in connection with the extension of credit, and a clear identification of the property to which the security interest relates.

Defendant urges that the provision for acceleration of the debt should be classified under 15 U.S.C.A. § 1638 (a) (9), cited above, as a default, delinquency or similar charge payable in the event of late payments, and should therefore appear on the face of the instrument.

Nowhere in the above quoted statute is there any required disclosure of a potential assignee or an acceleration clause. The fact of the matter is that there is adequate and proper disclosure of the acceleration clause made on the reverse side of the retail contract in question, and this court concludes that the failure to state the same on the front of the instrument does not constitute violation of the statute. Contra this view is expressed in Garza v. Chicago Health Clubs, Inc. 347 F. Supp. 955, 959 (N.D. Ill. 1972).

A basic study of this section reveals that it is concerned only with additional charges which may be assessed in the event of late payments. To this effect see Federal Reserve Opinion Letter No. 591 interpreting § 1638(a)(9), which states:

It is staff’s opinion that the thrust of the late payment, delinquency, or default disclosure required under § 226.8 (b) (4) relates basically to the types of charges which a creditor may assess automatically, without other conditions, when a late payment, delinquency, or default occurs. [Excerpted from letter of Griffith L. Garwood, Chief, Truth-in-Lending Section, dated 4-10-72]

The above excerpt explains the full meaning of 1638(a) (9), in itself, dealing with charges for additional monies which a creditor may claim upon default. An acceleration clause does not fall within the category of additional charges, for the debtor full well knows at the commencement of the contract the full amount of the sums for which he is responsible. In addition thereto, clause 11 on the face of the contract in question provides as follows:

LATE CHARGE PROVISIONS — The seller may collect a delinquency or collection charge for default in the payment of any installment of the contract where such default shall have continued for a period of 10 days, such charge not to exceed 5% of each installment in default or $5.00 whichever is the lesser.

It follows logically that lack of any requirement by the act to disclose a potential named assignee results in no obligation on the part of the seller under a retail installment contract to so do. Philbeck v. Timmers Chevrolet, Inc., 361 F. Supp. 1255 (N.D. Ga. 1973), merely held that where the financing company is so closely related in its operations with the seller as to make the latter a conduit for its placement of installment sales contracts, the finance company also may be liable with the automobile dealer for failure to comply with the act. The bank, however, is not a party to this suit.

The last contention of defendant is that the installment contract herein involved does not contain a dated authorization for credit life insurance although the authorization is signed separately and specifically by the defendant.

The testimony of plaintiff’s salesman was that he advised defendant of the availability of life insurance. When defendant accepted the insurance he was asked to sign and date the authorization. Plaintiff’s testimony then was that defendant forgot to date the signature and plaintiff failed to discover the deficiency.

The requirement that the authorization be dated is contained in “Regulation (Z),” 12' C.F.B. 226.4(a)(5), issued under the provisions of 15 U.8.C.A. § 1604, which states:

Charges or premiums for credit life * * * insurance, written in connection with any credit transaction [must be included in the finance charge] unless (i) The insurance coverage is not required by the creditor and this fact is clearly and conspicuously disclosed in writing to the customer; and (ii) Any customer desiring such insurance coverage gives specific dated and separately signed affirmative written indication of such desire after receiving written disclosure to him of the cost of such insurance.

15 U.8.C.A. § 1640 provides in. part as follows:

(c) A creditor may not be held liable in any action brought under the section for a violation of this part if the creditor shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

The above-quoted section requires that no recovery can be had under the Truth In Lending Act if the creditor shows by a clear preponderance of the evidence that the violation was unintentional. The court concludes that, under all the circumstances, the simple omission of the date where the other requirements of the section have been met amounts in fact in this case to nothing more than an unintentional bona fide error, excusable under the Act.

Plaintiff alleges that it is not a “creditor” subject to the Truth In Lending Act. It contends that it is not a person who offers credit in sufficient quantity to establish the status of a creditor. The court rejects that argument. One who sells automobiles on credit to a consumer, with financing charges imposed on the installment payment program, is subject to the requirements of the Truth In Lending Act. 15 U.S.C.A. § 1602(e), (f), (g), (h), (i); § 1605(a); 12 C.F.R. 226.2 (k), (1), (m); Mourning v. Family Publications Service, Inc., 411 U. S. 356, 93 S. Ct. 1652, 36 L. Ed. 2d 452 (1973); Philbeck v. Timmers Chevrolet Co., Inc., supra.

The court finds no merit to any of defendant’s claims for a setoff and directs that judgment be entered in favor of plaintiff against defendant in the sum of $530. plus attorney’s fees in the sum of $103, together with interest and costs of suit.