author: Yaccarino, J. C. C.

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. ROBERT F. JAHN, DEFENDANT-APPELLANT.
    Monmouth County Court Law Division
    Decided July 29, 1972.

      Mr. Alexander D. Lehrer for defendant (Messrs. Anschelewitz, Barr, Ansell & Bonello, attorneys).

      Mr. Robert Woods for the State (Mr. James Coleman, Prosecutor of Monmouth County, attorney.)
   Yaccarino, J. C. C.

Defendant appeals from a conviction in the Municipal Court of Belmar of excessive speed, in violation of N. J. S. A. 39:4-98(b). The appeal was a trial de novo.

Following the trial the municipal court judge entered a finding of not guilty as to the careless driving charge, then, on his own motion, amended the complaint and entered a finding of guilty on the offense of driving at excessive speed, in violation of N. J. S. A. 39:4-98(b).

Two issues are presented. The first issue to be considered is whether the municipal court had the power and authority by virtue of the New Jersey Court Rules to amend the complaint of careless driving to speeding, which is not a lesser included offense.

R. 7:10-2 provides:

The court may amend any process or pleading for any omission or defect therein, or for any variance between the complaint and the evidence adduced at the trial but no such amendment shall be permitted which charges a different substantive offense (other than a lesser included offense). If the defendant is surprised as a result of such amendment, the court shall adjourn the hearing to some future day, upon appropriate terms.

The above rule clearly states that a municipal court judge has the power to amend any process or pleading for any variance between the complaint and the evidence adduced at trial, but no such amendment shall be permitted which charges a different substantive offense, other than a lesser included offense. The issue then becomes whether speeding in violation of N. J. S. A. 39:4-98 (b) is a lesser included offense in a charge of violation of N. J. S. A. 39:4—97 (careless driving). No New Jersey authority is found. The two violations, “speeding” and “careless driving,” are separate and distinct violations with different penalties.

Since New Jersey is silent on this issue, research was directed to other forums. The Supreme Court of New Hampshire decided this issue in State v. King, 105 N. H. 47, 192 A. 2d 603 (1963). Defendant there was charged with a violation of a statute similar to New Jersey’s careless driving statute. As in the instant matter, defendant was found guilty of operating a motor vehicle at an unreasonable rate of speed. The Supreme Court of New Hampshire held that unreasonable speed was not an essential element of the offense charged and was not a lesser or included offense upon which the defendant could be found guilty.

The court held:

* * * Prohibiting grossly negligent operation has been a difficult statute to apply in its attempt to provide a criminal penalty for conduct which is less than reckless driving but more serious than ordinary negligent conduct. State v. Turgeon, 101 N. H. 300, 141 A. 2d 881; State v. Dodge, 103 N. H. 131, 166 A. 2d 467; State v. Hazzard, 104 N. H. 94, 179 A. 2d 282. It is clear, however, that although unreasonable speed may be a factor in determining grossly negligent operation of a motor vehicle, it is not a necessary, essential element thereof. State v. Davis, 99 N. H. 88, 105 A. 2d 47. See People v. Grogan, 260 N. Y. 138, 183 N. E. 273, 86 A. L. R. 1266. This is particularly so in this jurisdiction where the speed statute is not absolute but is a prima facie speed limit. RSA 263:54. State v. Swift, 101 N. H. 340, 143 A. 2d 114; Annot. 86 A. L. R. 1273, 1281; 52 A. L. R. 2d 1337. Inasmuch as an unreasonable speed is not an essential element of the offense of grossly negligent operation of a motor vehicle it is not a lesser or included offense upon which the defendant could be found guilty. Note, 11 Wis. L. Rev. 413; Donnelly, Goldstein & Schwartz, Criminal Law, 327, 328 (1962); 4 Wharton’s Criminal Law and Procedure, ss. 1187 and 1188 (1957); Fisher, Vehicle Traffic Law 196 (1961). [at 604)

In City of Toledo v. Soldier, 101 Ohio App. 273, 139 N. E. 2d 631 (Ohio Ct. App. 1956), the court stated in a similar situation.

It is a recognized rule that, where an accused is charged with a particular offense, he can not be convicted of another, unless the latter be included in the former. The due-regard ordinance, also referred to as ‘reckless operation of vehicles,’ and the speed ordinance, Section 21-6-7, Toledo Traffic Code (Section 4511-21, Revised Code), define separate offenses, and the accused can not be convicted on speed alone where the charge is laid under the due regard ordinance. This general rule is given special emphasis where the penalties are different. See City of Springfield v. Hanlon, 30 Ohio Law Abst. 596; City of Columbus v. Petty, 27 Ohio Law Abst. 249; City of Columbus v. Brown, 31 Ohio Law Abst. 530; City of Akron v. Hull, 72 Ohio App. 449, 52 N. E. 2d 877. [at 634]

See also, 52 A. L. R. 2d 1337, 1344; City of Akron v. Hull, 72 Ohio App. 449, 52 N. E. 2d 877 (Ohio Ct. App. 1943); Columbus v. Brown, 31 Ohio Law Abst. 530 (Ct. App. 1940); State v. Lewis, 256 N. C. 430, 124 S. E. 2d 115 (N. C. Sup. Ct. 1952); People v. Byrne, 65 Misc. 2d 174, 317 N. Y. S. 2d 243 (App. Div. 1970); State v. Mills, 181 N. C. 530, 106 S. E. 677 (N. C. Sup. Ct. 1921); Commonwealth v. Miller, 57 Dauph. Co. 325 (Pa. 1946).

The ratio decidendi of State v. King, supra, is directly applicable to the case at bar. Unreasonable speed may be a factor in determining careless driving of a motor vehicle, but yet it is not a necessary ingredient.

This court holds that under the authorities, speeding or a violation of N. J. S. A. 39:4-98 (b) can in no way be determined a lesser offense in a careless driving offense.

The judgment of conviction herein is vacated and the complaint against defendant dismissed. No costs.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    DERYL WATSON, PLAINTIFF-APPELLANT, v. NATHAN JAFFE, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Submitted October 30, 1972
    Decided November 10, 1972.
    Before Judges Collester, Leonard and Halpern.

      Mr. Eric A. Summerville, Newark Legal Services Project and Harris David, Director of Newark-Essex Joint Law Reform Project, attorneys for appellant (Messrs. Richard E. Blumberg and Barry Benefield, of counsel).

      Mr. Nathan Jaffe, pro se.

   Per Curiam.

The narrow issue on this appeal is whether the Security Deposit Act, N. J. S. A. 46:8-19 et seq., deprives a tenant of its benefits if he has been evicted for nonpayment of rent. The trial court held it did, and made no findings with respect to the issues requiring determination.

We find nothing in the statutes adopted by the Legislature (L. 1971, c. 233, effective June 21, 1971), of which N. J. S. A. 46:8-21.1 is a part, to justify the trial court's conclusion. These enactments were in pari materia, and, on well-settled principles of interpretation, are to be considered as a homogeneous and consistent whole, giving effect to all their provisions. So construed, we are satisfied they were adopted to protect tenants from overreaching landlords who require rent security deposits from tenants and then divert such deposits to their personal use. The fact that plaintiff was evicted for nonpayment of rent is no reason to deprive him of whatever benefits he may be entitled to under the law.

Reversed and remanded for a new trial. We do not retain jurisdiction.


text:
    RUFUS SNELL, PLAINTIFF-APPELLANT, v. THOMAS MURRAY AND THE CITY OF NEWARK, A MUNICIPAL CORPORATION, DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued September 20, 1972—Supplemental Material Submitted October 25, 1972
    Decided November 13, 1972.

      Before Judges Labrecque, Kolovsky and Matthews.

      Mr. Mark D. Larner argued the cause for appellant (Messrs. Budd, Larner, Kent, Gross & Picillo, attorneys; Nadine Taub, on the brief).

      Mr. Leonard Rosenstein argued the cause for respondent City of Newark (Messrs. Feuerstein, Sachs & Maitlin, attorneys) .

      Messrs. Shanley & Fisher filed a brief amicus curiae (Mr. Richard F. Brennan, on the brief).
   Per Curiam.

We affirm, essentially for the reasons set forth in Judge Tumulty’s reported opinion, 117 N. J. Super. 268, his conclusion that there was nothing in the proofs before him on defendant’s motion for summary judgment to justify holding defendant city vicariously liable for the conduct of one of its police officials whose gun fired and injured plaintiff while the officer was committing an armed robbery or extortion of the participants — plaintiff among them — in a. “friendly dice game.”

We find no merit in the suggestion advanced in the amicus curiae brief that a city should be held absolutely liable for any injury caused by a policeman’s handling of his revolver irrespective of whether or not the policeman was acting within the scope of his employment.

Further, the proofs furnished no support for plaintiff’s contention that there existed a question of fact as to whether the officer was acting “within the scope of his employment”; palpably he was not.

Finally, we are satisfied that grant of summary judgment to defendant was not precluded by plaintiff’s projected theory that recovery might be based on the city’s own negligence in failing to properly train the officer in the use of firearms. Cf. Peer v. Newark, 71 N. J. Super. 12 (App. Div. 1961), certif. den. 36 N. J. 300 (1962). There was nothing in the proofs on the motion to support the charge that the officer had not been properly trained and nothing to indicate that his alleged lack of training could have been a proximate cause of the incident resulting in injury to plaintiff. Obviously he knew and did not have to be told that his weapon was not to be used for the commission of an armed robbery or extortion.

The judgment is affirmed.


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

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. ROBERT MORGAN, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Submitted October 24, 1972
    Decided November 14, 1972.

      Before Judges Lewis, Carton and Mintz.

      Mr. Stanley C. Van Ness, Public Defender, attorney for appellant (Mr. Carmine P. Lunetta, Designated Counsel, on the brief).

      Mr. Joseph P. Lordi, Essex County Prosecutor, attorney for respondent (Mr. David L. Rhoads, Assistant Prosecutor, of counsel).
   The opinion of the court was delivered by

Lewis, P. J. A. D.

Defendant, after waiver of trial by jury, was tried by the Essex County Court and was found guilty of unlawful possession of a revolver in violation of N. J. S. A. 2A:151-41. He was sentenced to six months in the Essex County Correction Center and placed on probation for 12 months.

The single argument on appeal is that the revolver in question was inoperable and not a firearm as defined by N. J. S. A. 2A:151-1 and, therefore, defendant should have been acquitted.

There is no merit to this appeal. The evidence was to the effect that the firing pin of the revolver had been filed down and, in order for the gun to be fired, it would only be necessary to insert a thin piece of metal or paper between the pin and the cartridge. We also note that the revolver contained five cartridges of live ammunition within its chamber.

The element of operability stems from the definition of the term “firearm” in N. J. S. A. 2A:151-1 as a “revolver.” That section, in pertinent part, provides as follows:

a. Firearm or firearms includes any pistol, revolver, rifle, shotgun, machine gun, automatic and semiautomatic rifle, or other firearm as the term is commonly used, or any gun. device or instrument in the nature of a weapon from which may be fired or ejected any solid projectile, ball, slug, pellet, missile or bullet, or any gas, vapor or other noxious thing, by means of a cartridge or shell or by the action of an explosive or the igniting of flammable or explosive substances. * * *
b. Pistol or revolver includes any firearm with an overall length less than 26 inches * * *.

It may become a question of fact as to whether a particular device possesses or retains the characteristics of a firearm as thus defined. Conceivably, although having initially possessed such characteristics, it may have lost them through mutilation, destruction or disassembly. Where there appears to be a legitimate dispute as to whether any such device possesses or retains the essential characteristics of a weapon, it is appropriate for the parties to offer proof with respect to its operability. That question should be resolved as other questions of fact.

Although this is apparently an issue of first impression in this jurisdiction, State v. Yarusso, 105 N. J. Super. 311, 313 (Cty. Ct. 1969) (issue noted but not decided), the recent decision of State v. Greer, 107 N. J. Super. 92 (App. Div. 1969) is pertinent. There the court held the fact that the blade of a switchblade knife was bent, making the knife inoperable, did not entitle defendant to an acquittal on an indictment charging possession of a switchblade knife. Cf. State v. Schultheis, 113 N. J. Super. 11, 16 (App. Div. 1970), certif. den. 58 N. J. 390 (1971).

Courts of other jurisdictions interpreting similar firearm statutes have generally concluded that a firearm is no less a firearm if it is rendered temporarily inoperable because of a missing and easily replaceable part or by need of some minor repair or adjustment. E. g., Commonwealth v. Bartholomew, 326 Mass. 218, 93 N. E. 2d 551, 552 (Sup. Jud. Ct. 1950); United States v. Cosey, 244 F. Supp. 100, 102 (E. D. La. 1965); 94 C. J. S. Weapons § 6 at 489; 56 Am. Jur., Weapons and Firearms, § 13 at 999-1000. See Annotation, “Validity and Construction of Gun Control Laws,” 28 A. L. R. 3d 845, 863-865 (1969). See also Annotation, “Eact that gun was unloaded as affecting criminal responsibility,” 79 A. L. R. 2d 1412, 1430-1432 (1961).

Although courts have disagreed over what the extent of inoperability should be, compare Bartholomew and Cosey, supra, with People v. Jackson, 266 Cal. App. 2d 341, 72 Cal. Rptr. 162, 166-168 (Ct. App. 1968), and United, States v. Thompson, 202 F. Supp. 503, 506-507 (N. D. Cal. 1962), it is sufficient for the purposes of this decision to quote the language of Bartholomew, supra:

While it may be conceded that a weapon designed for firing projectiles may be so defective or damaged that it has lost its initial character as a firearm, * * this character is not lost when a relatively slight repair, replacement, or adjustment will make it an effective weapon. * * * In the instant case the absence of the easily replaceable firing pin did not destroy the character of the implement in question as a machine gun. [93 N. E. 2d at 552]

Here it is plain that the operability of the revolver was a simple matter within the control of defendant. As in Bartholomew (and Gosey) there was expert testimony to establish that the weapon was capable of being fired with but minor adjustment. By this proof the State fairly countered defendant’s claim that the revolver was inoperable.

Judgment of conviction affirmed.


author: Kimmelman, J. S. C.

text:
    LOCAL 1199, DRUG & HOSPITAL EMPLOYEES UNION, AFL-CIO, ET AL., PLAINTIFFS, v. MOUNTAINSIDE HOSPITAL, DEFENDANT. LOCAL 68, INTERNATIONAL UNION OF OPERATING ENGINEERS, AFL-CIO, PLAINTIFF, v. MOUNTAINSIDE HOSPITAL, DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided November 1, 1972.

      Mr. Philip Freedman, Attorney for plaintiffs, Local 1199, Drug & Hospital Employees Union, AFL-CIO, and others. (Messrs. Teltser & Greenberg).

      Mr. Victor J. Parsonnet, Attorney for plaintiff, Local 68, International Union of Operating Engineers, AFL-CIO (Messrs. Parsonnet, Parsonnet & Duggan).

      Mr. Edward F. Ryan, Attorney for defendant, Mountainside Hospital (Messrs. Carpenter, Bennett & Morrissey).

   Kimmelman, J. S. C.

Mountainside Hospital is a voluntary non-profit hospital located in Montclair, New Jersey. Local 1199 of the Drug & Hospital Employees Hnion seeks to compel the defendant hospital to recognize it as the collective bargaining representative for the service and maintenance personnel of the hospital numbering about 412 employees or in the alternative, to compel a representation election among such employees to determine whether there will be an authorized bargaining representative for them. Local 68 of the International Hnion of Operating Engineers contends that it represents a majority of the maintenance employees whose total number is about 38 and likewise seeks to compel either recognition by the hospital or a representation election.

While the hospital may prefer to continue without the intervention of any union, nevertheless, it realistically recognizes the inevitability of a union election involving these employees and, assuming that event, argues that it should not be compelled to deal with more than one union. The hospital is apprehensive about the fragmentation of its employees into more than one bargaining group. It foresees an increased burden to its administrative staff and the possibility of friction between competing labor organizations with resultant discord amongst employees, all of which will jeopardize the continuity and quality of the services it renders to the community.

As a consequence, the narrow issue for decision is whether the maintenance employees sought to be represented by Local 68 shall be carved out of the broader service and maintenance group sought to be represented by Local 1199. The defendant hospital urges that an election should only be ordered for the most appropriate bargaining unit which it contends is the overall service and maintenance group. Thus, the court is called upon to determine whether there may be more than one appropriate collective bargaining unit for the broad category of service and maintenance employees of a voluntary non-profit hospital.

Article I, paragraph 19 of the Constitution of New Jersey, 1947 provides: “Persons in private employment shall have the right to organize and bargain collectively.” By virtue of this authority courts of this State have the power to order a representation election and to require a private non-profit hospital to bargain collectively with a designated collective bargaining representative, even though employees in a private non-profit hospital such as the defendant are expressly excluded from the scope of the Labor-Management Relations Act of 1947, 29 U. S. C. A. § 151 et seq. Johnson v. Christ Hospital, 84 N. J. Super. 541, 548 (Ch. Div. 1964) aff'd 45 N. J. 108, 110 (1965); Bowman v. Hackensack Hospital Associates, 116 N. J. Super. 260 (Ch. Div. 1971). Note also that such employees are outside the scope of the New Jersey Employer-Employee Relations Act, Chapter 303 of the Laws of 1968, 34 N. J. S. A. 13A-1 et seq., as said Act applies only to public employees.

In the absence of controlling legislation establishing the standard and test required to determine the appropriateness of a collective bargaining unit with respect to voluntary non-profit hospitals, courts may refer to the case law of this jurisdiction and the body of labor law that has developed in both the federal and various state jurisdictions. Johnson v. Christ Hospital, supra; Bowman v. Hackensack Hospital, supra.

In Morand Bros. Beverage Co., 91 N. L. R. B. No. 58, 26 LRRM 1501 (1950) the National Labor Relations Board ruled that there is no requirement under the provisions of the National Labor Relations Act that a bargaining unit must be the only appropriate unit, or the ultimate unit, or the most appropriate unit, the only requirement being that the unit must be an appropriate unit to insure to employees, in each particular case, the fullest freedom in exercising the rights guaranteed to them by the National Labor Relations Act. State labor relations boards in both New York and Pennsylvania observe the same standard. Thus, where an application was made by a union to act as the bargaining representative for the combined group of service and maintenance employees in a voluntary non-profit hospital, such combined group was found to be an appropriate unit, absent a similar application for a portion of the group by a competing union. St. John’s Queens Hosp., 26 SLRB 529 (1963); Hayes Seventy Third Corp. Physicians Hosp., 26 SLRB 428 (1963). On the other hand, where union organizations have vied to represent the service and maintenance employees as separate bargaining units, the division of these employees into separate units has likewise been found appropriate. Long Island College Hospital v. Local 1199, 32 SLRB 210 (1969); Mercy Hospital of Buffalo v. International Union Operating Engineers, Local 907, 31 SLRB 347 (1968); Long Island College Hospital v. Maintenance Division of the Bldg. & Const. Trades, 27 SLRB 406 (1964); Wyckoff Heights Hospital, 27 SLRB 75 (1963); See in Re Employees of the Hahnemann Medical College and Hospital of Philadelphia, No. Pera-R-28-E (Pa. L. R. Bd. 1971). In other words, while the combination of service and maintenance employees into one unit for collective bargaining purposes may produce an appropriate unit, such fact does uot preclude the alternative of separating each group into individual bargaining units under suitable circumstances.

The National Labor Eelations Board sets forth the criteria for determining the appropriateness of a bargaining unit as follows:

First and foremost is the principle that mutuality of interest in wages, hours, and working conditions is the prime determinant of whether a given group of employees constitute an appropriate unit. In deciding whether the requisite mutuality exists, the Board looks to such factors as the duties, skills and working conditions of the employees involved and especially to any existing bargaining history . . . the Board also considers the extent of organization, and the desires of employees where one of two units may be equally appropriate. Continental Baking Co., 99 N. L. R. B. 123, 30 LRRM 1119, 1120 (1952).

Similarly, the New Jersey Employer-Employee Relations Act speaks in terms of defining the negotiating unit with due regard for the community of interest among the employees involved. N. J. S. A. 34:13A-5.3.

In the instant case, had there been no contest between competing units, I would have no hesitancy in finding that the service and maintenance employees as a combined group form an appropriate bargaining unit. However, • the fact is that Local 68 seeks to eliminate from such combined group the maintenance employees, and it would appear that such is the desire of the maintenance employees. Under these circumstances, the court must determine whether the two groups can be differentiated for bargaining purposes.

On the basis of the testimony in this case, I find that as a group the maintenance employees at Mountainside Hospital are paid a relatively higher scale of wages than the service employees. Their duties are performed throughout the entire hospital complex and not confined along fixed departmental lines as is the case with the service workers. They are generally technically more proficient and are classified in job categories separate and distinct from the service employees. The nature of their work coupled with the skill does not provide an inherent community of interest or an interchange with the lesser skilled service group. While these distinctive characteristics may not be as pronounced when considering the helpers and unskilled workers in the maintenance group, generally speaking, such lower level maintenance personnel aspire in due course to the higher paid and more skilled level. Lastly, as heretofore indicates, the maintenance employees desire to create their own identity for bargaining purposes. I therefore conclude that the maintenance employees as a group have a community of interest of their own and may be regarded as an appropriate unit, separate and distinct from the service employees who may also be regarded as an appropriate unit. I adopt the reasoning the New York State Labor Eelations Board in the Wyckoff Heights Hospital case, supra, as follows:

On (lip, one liand, they are a homogeneous group of skilled employees having relatively higher earnings and no interchange with the service employees, as well as a history of bargaining in, and Board decisions establishing, separate units of skilled building maintenance employees in non-hosiiital cases. On the other hand, there is our policy against over-compartimentalization of hospitals into numerous small bargaining units, and prior Board decisions (uncontested to be sure) finding maintenance and service units appropriate in hospitals, as well as some history of bargaining in the hospital industry whereby the maintenance employees have been included in the same unit as the service employees. We find that these factors are equally balanced . . . Accordingly, as we have done in similar situations, we shall ascertain, by a self determination election, the desires of the engineer maintenance employees as to whether they prefer to bargain in a separate unit, or in a larger unit including the service employees. 27 SLRB at 83.

I am mindful of the apprehensiveness and anxiety of the hospital in this case hut nevertheless must base this decision upon the facts as they exist and not as they are fancied to exist at some time in the future. Should dissension and a consequent breakdown in the services rendered by the hospital to the community occur in the future then the hospital may apply to the appropriate forum for whatever relief may be warranted at the time.

Counsel are directed to prepare an appropriate Order for Judgment in conformity with this opinion which order shall provide for an election to determine whether or not the maintenance and service employees desire to be represented and to determine if there are to he separate units in accordance with the wishes of the employees, said election or elections to be held after a reasonable campaign period, not later than 45 days from the date of the Order.

      By way of illustration reference was made at the trial to the status of bargaining units in .certain representative New Jersey voluntary non-profit hospitals, e. g. the service and maintenance employees are represented in a single bargaining unit by Local 1199 at: Clara Maass—Belleville; Orange Memorial—Orange; Helen Fuld—Trenton; St. Mary's—Hoboken; and Middlesex General—New Brunswick; Local 1199 represents the service employees and Local 68 represents the maintenance employees in separate bargaining units at: St. Michael’s—Newark ; St. Barnabas—Livingston ; Hebrew Home & Hospital-—Jersey City; and Beth Israel—^Newark; and Local 68 represents the maintenance emj;loyees at East Orange General.


author: Seidman, J. S. C.

text:
    BOISE CASCADE HOME & LAND CORPORATION, A DELAWARE CORPORATION, PLAINTIFF, v. DIVISION OF THE NEW JERSEY REAL ESTATE COMMISSION IN THE DEPARTMENT OF INSURANCE, DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided November 3, 1972.

      Mr. John W. Bissell for plaintiff (Messrs. Pitney, Hardin & Kipp, attorneys).

      Mr. Steven R. Bolson, Deputy Attorney General, for defendant (Mr. George F. Kugler, Jr., Attorney General, attorney) .
   Seidman, J. S. C.

On stipulated facts, each side moves for summary judgment.

Plaintiff Boise Cascade Home & Land Corporation filed a complaint for a declaratory judgment that certain telephone operations conducted by its employees do not violate the New Jersey Real Estate License Act, N. J. S. A. 45:15-1 et seq., and that the telephone operators need not be licensed either as real estate salesmen or brokers. The complaint also seeks to enjoin defendant Real Estate Commission from interfering with the telephone procedures and from resorting to sanctions against plaintiff.

The narrow issue to be resolved is whether persons hired by the corporate owner of building lots to solicit prospective purchasers by telephone, are engaged in the real estate business so as to require their being licensed.

I

The stipulated facts are these:

Boise Cascade Home & Land Corporaton (Boise Cascade), the owner and operator of a large recreation community in the Poeonos known as The Hideout, is in the process of constructing recreation facilities and selling to the public over 2400 vacant lots as recreation and vacation home sites.

In November 1970 two licensed New Jersey real estate brokers received permission from the New Jersey Eeal Estate Commission (Commission), pursuant to N. J. S. A. 45:15-16.1, to engage in promotional sales of Hideout lots in New Jersey; and, since that date, such promotional sales activity has taken place in New Jersey under the supervision of the brokers. Boise Cascade has an office in Clifton, Passaic County, out of which operates a team of about 25 licensed real estate salesmen, employed by and under the supervision of one of the brokers. Clerical personnel and persons other than the salesmen are employees of Boise Cascade.

As a followup to its media advertising, Boise Cascade employs at the Clifton office 15 or 20 persons, mostly girls, whose function it is to make telephone calls to New Jersey residents. A prepared script is recited, reading as follows:

Good (morning-afternoon)
Mr.-Mrs.---. This is---calling for the Hideout. Are you familiar with the Hideout? It’s Boise Cascade Corporation’s newest year-round recreational community located in the Poeonos of Pennsylvania. We are calling to acquaint residents of -(area)- with it.
We will have licensed rejiresentatives in your area and if you are interested, one could stop by for 10-15 minutes to tell you more about it. You are under no obligation — again we are just acquainting families with what Boise Cascade Gorp. has done.
Would-(night)-be convenient between-(time)- and-(time)- for you and your (husband-wife) ? It’s only for 10-15 minutes.

If the person called shows interest, an appointment is made for a visit by a licensed representative; otherwise, the call is terminated. In the exceptional situation where a person, though interested, does not desire to make an appointment, follow-up calls are made by a licensed salesman or broker.

The telephone girls are paid by Boise Cascade at an hourly rate without regard to the number of cálls made, the number of appointments made, or the number of sales ultimately consummated. The licensed New Jersey real estate representatives are paid through their employing broker on a straight commission basis on sales actually consummated, as are the Pennsylvania salesmen who show and actually seli the lots.

After an investigation of the telephone procedure with the cooperation of Boise Cascade and its broker, and after an informal conference with-Boise Cascade’s representatives, the Commission advised that it considered the use of unlicensed individuals making the telephone calls to be a violation of N. J. S. A. 45:15—1, 2 and 3, and that Boise Cascade, its broker and the telephone girls would be subject to the penal and administrative sanctions of N. J. S. A. 45:15-17, 18, 23 and 24 in the event the practice continued. As a result Boise Cascade halted the use of its telephone procedures in New Jersey^ rather than risk prosecution.

If required to comply with the position taken by the Commission, Boise Cascade must either discontinue permanently its telephone procedures and have only licensed real estate salesmen employed by the broker perform this function, or bear the expense of financing the required schooling and licensing of its telephone operator employees.

II

The court was of the view that the stipulated facts did not sufficiently detail the operations at plaintiff’s Clifton office. Unanswered were such questions as: Who operated that office? Who hired and instructed the girls? Under whose supervision did they function? What relationship was there between plaintiff, the telephone girls, the salesmen and the brokers? At the court’s request, plaintiff sought to answer these questions by producing as a witness William J. Murphy, III, its regional manager, or coordinator of sales activities, for New Jersey. There is no reason to doubt his testimony.

Murphy explained that Boise Cascade rents office space in Clifton, and that a real estate broker maintains a sub-office on the premises. All the operating expenses, includrent, electricity and telephone are paid by Boise Cascade. The telephone room manager is responsible for hiring and training the telephone girls, who perform their functions under the scrutiny of a supervisor.

A telephone girl’s employment, on an average, lasts about a month. The job, a routine one, requires the repetitive reading of a script during a four-hour shift. Calls are made from lists of names drawn mainly from city directories. If the person called is responsive, the name, address and telephone number are written down and the memorandum turned in to the supervisor who then hands it for checking to one of the telephone girls designated as a “confirmer,” following which the lead is referred to a licensed salesman, who contacts the prospect.

Murphy further stated that if, after listening to the reading of the script, the person called requests further information, it is the obligation of the telephone girl to stress the fact that a representative would be in the area to explain the project in more detail. If there is a lack of interest, the telephone girl is expected to say something like, “This is why our licensed representative is going to be there in the area, to find out if you are interested.”

Telephone girls are fired if they do not produce an average of three or four appointments in a four-hour shift. One of the requirements of the job is a pleasant friendly voice. To keep up their interest a bell is rung by the supervisor whenever an appointment is made.

The broker, according to Murphy, is not involved in the actual sale of lots. His function is mainly to make sure that the salesmen are properly licensed.

Ill

The Commission contends that the telephone girls employed by Boise Cascade are engaged in the real estate business within the meaning of N. J. S. A. 45:15-1 et seq., and, therefore, must be licensed as required by the statute. Boise Cascade, on the other hand, argues that the statute does not apply to the kind of activity described in the stipulated facts, and that the telephone girls do not have to be licensed. A resolution of the issue obviously requires an analysis of the pertinent statutory provisions.

N. J. S. A. 45:15-1 states that no person shall engage either directly or indirectly in the business of real estate broker or salesman, temporarily or otherwise, and no person shall advertise or represent himself as being authorized to act as a real estate broker or salesman, or to engage in any activities described in N. J. S. A. 45:15-3, without being licensed to do so as provided in the statute. According to section 2 of the statute, any single act, transaction or sale constitutes engaging in business within the meaning of the statute.

The definition of a real estate broker, contained in section 3, is broad. In pertinent part, it includes anyone “who, for a fee, commission, or other valuable consideration * * * solicits for prospective purchasers or assists or directs in the procuring of prospects * * *”. A real estate salesman includes any person employed by and operating under the supervision of a licensed real estate broker, whose function, among other things, is “to solicit for prospective purchasers or lessees of real estate,” or “to sell or offer to sell lots or other parcels of real estate.”

There is no doubt that the telephone girls are hired and paid by Boise Cascade to solicit for prospective purchasers or to assist in the procuring of prospects. To this extent, what they do fits within the definition of a real estate broker. Boise Cascade, however, points to that portion of section 4 which provides, in substance, that the statute does not apply to any person, firm, partnership, association or corporation “who, as a bona fide owner or lessor, shall perform any of the aforesaid acts with reference to property owned by him.” The argument is made that since a corporate landowner can act only through its agents or employees, those who are engaged in the defined activities are, like their principal or employer, also excepted from the statute.

In claiming such exemption Boise Cascade recognizes that it must first overcome the obstacle which appears in section 3, the pertinent segment of which is as follows:

In the sale of lots pursuant to the provisions of this article, the term “real estate broker” shall also include any person, partnership, association or corporation employed by or on behalf of the owner or owners of lots or other parcels of real estate, at a stated salary, or upon a commission, or upon a salary and commission, or otherwise, to sell such real estate, or any parts thereof, in lots or other parcels, and who shall sell or exchange, or offer or attempt or agree to negotiate the sale or exchange, of any such lot or parcel of real estate.

In other words, although section 4 excepts from the statute a bom fide owner who performs any of the acts which otherwise would require licensing, and, it is argued, corporate employees performing these acts are likewise exempt, the exception does not apply, in the ease of the sale of lots, to persons employed by the owner to sell such lots, and who sell or exchange them, or offer or attempt or agree to negotiate for their sale.

In contending that employees of corporate owners of real estate, other than in the case of the sale of lots, are exempted from the statute, Boise Cascade cites Palkoski v. Garcia, 32 N. J. Super. 343 (App. Div. 1954), aff'd 19 N. J. 175 (1955), which suggests that since a corporation acts only through its agents and servants, where a corporate owner of real estate is excluded from the statutory license requirement,. its,¡employee, performing the same function, is also within the exclusion. The Commission claims that this portion of Pallcoshi is dictum and that to apply it to the present case would defeat the purpose of the statute.

The Commission relies heavily upon Alligood v. Florida Real Estate Commission, 156 So. 2d 705 (Fla. App. 1963), which involved the interpretation and application of a section of the Real Estate License Law of Elorida. It is the only reported case brought to the court’s attention which is factually similar to the one at bar.

In that case, the plaintiff instituted a suit for declaratory decree against the commission claiming that her activities as a telephone solicitor did not come within the section of the law requiring certain services rendered in connection with the purchase and sale of real estate to be performed only by a registered broker or salesman. The plaintiff, who was employed by Gulf American Land Corporation, the owner and subdivider of land in Elorida, to call persons by telephone and invite them to visit her employer’s project, did not quote prices or terms and gave no pertinent details relative to the land being offered for sale. After giving the name and address of an interested prospect to a supervisor, she had no further contact with such person. Her compensation was at the rate of $1.15 per hour, plus $3 for every person whom she successfully solicited to visit the area.

On these facts, the Elorida court held that plaintiff came within that section of the statute which declared that every person who, for compensaion or valuable consideration, took part in the procurement of purchasers of real property, or who directed or assisted in the procuring of prospects, was a real estate broker or a real estate salesman who had to be registered or licensed as such. The court said:

It was the intent of these statutes to define and regulate the real estate brokerage and sales profession. It appears that the legislature intended to encompass a variety of services, which if performed in this state, for another, for compensation, would require licensing. One of such services is the obtaining of prospects for the purchase of real estate.
The purpose of this legislation is to protect the public from being subjected to real estate sales programs by persons not licensed by the commission and therefore perhaps not qualified to perform such services. Perhaps, too, persons not licensed by the commission would not be well versed in the high ethical standards of conduct which the profession, with the aid of the Florida Real Estate Commission, is striving to accomplish.
By virtue of this statute, a person performing particular acts either is, or is not, operating as a real estate broker or salesman and hence subject to the requirement of licensing as such. General statements, or so called “definitions” of real estate brokers or salesmen, or of services generally performed by them have no material degree of control upon the determination of whether or not a person is operating as a broker or salesman. The language of this statute is the controlling and final definition of a real estate broker, or salesman, in this state.
The legislature has seen fit to provide that one who directs or assists in the procuring of prospects for the purchase of real estate shall be registered, or licensed, as a real estate salesman, or broker.
The language which is pertinent to this ease is admittedly broad, but it is equally clear and unambiguous. No resort need be made to the general rules of judicial interpretation to understand it. It is plain and simple English and it is the duty of the courts to apply the literal meaning of the language. See 50 Am. Jur., 236, Statutes, Section 241. Also 30 Fla. Jur. 174, Statutes, Section 74. See especially Van Pelt v. Hilliard, 75 Fla. 792, 78 So. 693, L. R. A. 1918E, 639. The problem at hand is, therefore, not to determine the meaning of the statute or interpret it, but to determine whether the appellant was assisting in the procuring of prospects for the purchase of real property.
It appears that each of the essential elements of the statute were involved in the appellant’s employment and the pursuit of her duties in such employment.
The “bonus” of $3.00 for each prospect the plaintiff produced is a material factor in this determination. This element takes the job out of the classification of simple clerical employment and indicates the importance of the salesmanship element. True, she makes no direct effort at sales but like the circus “drummer” she gets them in the tent for the show.
The ultimate consideration is that these prospects who are the object of extensive exposure to the sales program at some considerable expense are those determined by the efforts of the plaintiff to be at least interested in the project. She certainly is taking part in the procuring of prospective customers. The specific activities of the appellant constituted the first and very important step in a field of endeavor which lends itself logically to the safeguards of the regulatory measures of the Florida Real Estate Commission. Foulk v. Fla. Real Estate Commission (1959 Fla. App.) 113 So. 2d 714; Section 475.01(2), Fla. Statutes, 1961, F.S.A.; 5 Fla. Jur. Brokers, Section 5, Page 26.

Boise Cascade seeks to distinguish Alligood on both the facts and the law. There are, it is true, differences between the procedures utilized by the telephone solicitor in Alligood and those in the present case. In fact, it seems as though Boise Cascade was aware of Alligood and endeavored studiously to overcome some of the objectionable features thereon. The employee in that case received a commission for each appointment she arranged, a factor the Florida court considered material in its determination. However, the absence of commissions in this case ought not necessarily to lead to a contrary conclusion. Boise Cascade’s telephone girls do more than only simply clerical tasks. They do not, as Boise Cascade contends, perform the same ministerial function as a secretary who types letters and makes appointments.

It is evident that the telephone girls here play a significant part in the development of plaintiff’s sales program. They are the first to make direct contact with members of the public. They are chosen not simply to recite a prepared script, but rather to attract attention by the manner in which the message is projected. Murphy candidly stated that a girl can get appointments if she has a pleasant voice and sounds friendly. The incentive, to her, is not a bonus or commission; it is the threat of losing her job, and the ringing of a bell to signal each appointment is intended to spur on the telephone girls to greater efforts. As was said so well in Alligood, the telephone girl, like the circus drummer, “gets them in the tent for the show.” There is no doubt that these employees, to use the language of our statute, solicit for prospective purchasers or assist in the procuring of prospects. Factually, therefore, Alligood is not dissimilar from the one now before the court.

Alligood is distinguishable in another respect. It was noted earlier herein, that N. J. S. A. 45:15-4 excludes from the operation of the statute a bona fide owner of land who performs acts which, if done by another, would require a license. This exclusion, it is argued, applies as well to corporate agents or employees doing those acts. However, in the sale of lots the term real estate broker includes anyone employed by the owner thereof, at a salary or commission or otherwise, to sell such real estate, and who shall sell or exchange, or offer or attempt or agree to negotiate the sale of any such lot. N. J. S. A. 45:15-3. The Florida real estate license law, F. S. A. § 475.01 et seq., has no comparable provisions. It contains a very limited exclusion of owners or employees of corporate owners. As that statute is worded, the term “broker” or “salesman” does not apply to a person who deals with property of which he is a part owner (except as otherwise provided therein), or to the president or other designated officer of a corporation engaged in the sale of its own properties. Consequently, the fact that the plaintiff in Alligood was an employee of the corporate owner of the land is of no significance, since there was no statutory exception applicable to her.

IV

The problem before the court, in the present case, is not so much the scope of Palkoski v. Garcia, supra, which in any event ought not to be extended beyond the issues involved therein. It is whether the telephone girls are, in fact, employed on behalf of Boise Cascade, at a stated salary, to sell lots and whether they “sell or exchange, or offer or attempt or agree to negotiate the sale or exchange, of any such lot or parcel of real estate.” This is the crucial issue, for if the employees do not get within that category they are not subject to the licensing requirements of the statute in question.

Boise Cascade contends that the Legislature did not intend to prohibit all real estate activities by employees of corporate owners, but merely to regulate those aspects constituting actual sales. An attempt is made to distinguish the selling of real estate from the solicitation of prospective purchasers. This concept of the statute, in the view of the court, is too narrow.

The licensing act is a regulatory measure which represents the strong public policy of this State. Tanenbaum v. Sylvan Builders, Inc., 29 N. J. 63, 71 (1959); State v. Stockl, 85 N. J. Super. 591, 597 (Cty. Ct. 1964). It is designed to protect the public from fraud, incompetence, misinterpretation and sharp or unconscionable practice. Ellsworth Dobbs, Inc. v. Johnson, 50 N. J. 528, 553 (1967). A commission has been created to the end that in the interest' of the public welfare, incompetent, unworthy and unscrupulous persons would be excluded from the real estate brokerage business. Division of N. J. Real Estate Comm’n v. Ponsi, 39 N. J. Super. 526, 532-533 (App. Div. 1956); Handelsman v. Div. of N. J. Real Estate Common, 101 N. J. Super. 244, 248 (App. Div. 1968).

The type of venture involved in this case, the promotional sales of property located outside the State, has received especial legislative attention. See N. J. S. A. 45:15-16.1 et seq., requiring particulars of such promotional sales to be filed with the Commission, the purpose of which is to prevent fraud and deception of the public in real estate transactions. Such statutes, enacted here and elsewhere, reflect the widespread concern that promotional sales be free of unethical or fraudulent practices. See Gaitanis, “Recent Florida and Federal Laws Regulating Promotional Land Sales,” 43 Fla. Bar J. 90 (1960); Walsh, “Consumer Protection in Land Development Sales,” 44 Conn. Bar J. 403 (1970).

Remedial statutes are to be given a liberal interpretation, 3 Sutherland, Statutory Construction (3d ed. 1943), § 5701; 50 Am. Jur., Statutes, § 392; 82 C. J. S. Statutes § 388. See State v. Meinken, 10 N. J. 348, 352 (1952); Carianni v. Schwenker, 38 N. J. Super. 350, 361 (App. Div. 1955); Newark v. Dept. of Health of N. J., 109 N. J. Super. 166, 177 (App. Div. 1970); Ricci v. Ricci, 96 N. J. Super. 214, 227 (Cty. Ct. 1967).

Boise Cascade’s contention that the language of N. J. S. A. 45:15-3, insofar as it relates to the sale of lots by an employee of the owner, does not prohibit all real estate activities by such employees but merely regulates those aspects constituting actual sales, is unsound, as is the further argument that the term “to sell,” as used in the statute, refers only to acts effecting a transfer of realty and not to such pre-sale activities as the solicitation of prospective customers. To circumscribe the terms in such fashion would negate the purpose of the act and frustrate the public policy of the State. The process of selling real estate cannot be fragmented into solicitation, negotiation and consummation, with only the latter phase encompassed within the term “to sell.” It has been held that the words “sell” and “sale,” as applied to the relation between the owner of land and a real estate broker working to secure a purchaser of the land, import no more than the act of bringing the owner and purchaser together on terms satisfactory to both, or procuring a purchaser able, ready and willing to buy on the terms fixed by the seller. Resky v. Meyer, 98 N. J. L. 168, 171-172 (E. & A. 1922). In agreements between the owners of land and real estate brokers, the words mean negotiating a sale by finding a purchaser on satisfactory terms. Lindley v. Keim, 54 N. J. Eq. 418, 423 (E. & A. 1896). If, in the case of real estate brokers, the term “to sell” means “to negotiate a sale,” the question which arises is whether “negotiating” requires the conducting by a broker of all proceedings in a transaction from the initial steps looking to the making of a contract up to and including the ultimate conclusion thereof, or whether it connotes something less than that. This question was considered and answered in Corson v. Keane, 4 N. J. 221, 224-227 (1950). The holding in that case was that one not licensed as a real estate broker, in arranging a meeting for the negotiation of a loan secured by a real estate mortgage, was precluded by the statute from recovering a commission pursuant to an agreement therefore. The court quoted the following excerpt from the case of Baird v. Krancer, 138 Misc. 360, 246 N. Y. S. 85 (Sup. Ct. 1930):

The essential feature of a' broker’s employment is to bring the parties together in an amicable frame of mind, with an attitude toward each other and toward the transaction in hand which permits their working out the terms of their agreement. They may reach that agreement without his aid or interference. Indeed, in a transaction of any magnitude, the terms would never be settled beforehand or negotiated finally by the broker. * * *
This does not mean that the broker has not negotiated the transaction. * * *
If the statute does not apply to such a situation, then it is a toothless enactment. Every unlicensed broker will make the same argument that the plaintiff here has made, that he did not have to bring the parties to actual agreement upon all the details, that that phase was something for the parties themselves to determine. In short, every unlicensed broker will be enabled to carry on his business just as he did before the statute came into existence, simply by calling himself a finder, an originator, an introducer, instead of a broker. This would be an absurd limitation of the statute and one unfounded in reason or policy. A broker “negotiates” just as much when he brings parties together in such frame of mind that they can by themselves evolve a plan of procedure, as when he himself carries on the discussion and personally induces an agreement to accept a specific provision.

The broad scope of the licensing act is further exemplified by the statement in Tanenbaum v. Sylvan Builders, Inc., supra, 39 N. J. at 71, that any single act in the execution of the authority to serve as broker in connection with the stimulation or consummation of a sale constitutes engaging in business and requires the actor to have a license.

In short, to carry out the implicit purpose of the statute, the term “to sell” must be construed to comprise not only the ultimate transfer of ownership of property, but also any act which, in a significant way, is designed and intended to lead to the consummation of the transaction. This necessarily includes the initial phase of solicitation. Thus, a person employed by the owner of lots, at a stated salary or otherwise, to sell such lots is not one engaged solely to transfer or contract to transfer the realty. In the context of the statute, the term “to sell” should reasonably include any one employed to participate significantly in the selling process, including solicitation or negotiation. As was said earlier herein, the role of the telephone girls is important. The procuring of prospective customers is an essential step in the sales program. The court is convinced that, by a liberal but sensible interpretation of the statute, the telephone girls should be considered employees hired “to sell”' lots.

Boise Cascade notes a dichotomy in that portion of N. J. S. A. 45:15-3 which, in the case of the sale of lots, defines “real estate broker” to include any one employed by the owner io sell the lots and who shall sell or exchange, or offer or attempt or agree to negotiate the sale or exchange thereof. The argument is advanced that an employee, to require licensing, must not only be hired to sell lots; he must also sell or negotiate the sale of such lots. The-court does not believe that the distinction sought to be-made is of consequence. The broad interpretation given to the term “to sell” is equally applicable to the clause- “and who shall sell * * * or offer or attempt to agree to negotiate the sale * * * of any such lot.” The solicitation by the telephone operators is, in a sense, a preliminary offer- or attempt to negotiate a sale, and is, of course, part of the selling process.

It should be emphasized that the statutory concern is not merely to license persons employed for the limited! purpose of telephone solicitation. The strong public policy of the State is that the selling of real estate, unless otherwise specified, shall be in the hands of qualified and licensed salesmen and brokers; and the solicitation of prospective purchasers, whether by telephone or in some other-manner, being an essential element of the selling p-rocess, should be done by those who are licensed to engage in the-real estate business. The public should not be subjected to real estate sales programs by unlicensed persons. Alligood v. Florida Real Estate Commission, supra, 156 So. So. 2d at 707.

It is the conclusion of the court that the telephone operation conducted by Boise Cascade violates N. J.. S. A. 45:15-1 et seq., and that the solicitation of prospective purchasers in that fashion cannot be done by unlicensed persons.

V

Boise Cascade argues that the Real Estate License Act, if applied to its telephone operator,- would offend, the due process and equal protection clauses of the United States and New Jersey Constitutions. The point is without merit. It is the duty of this court so to construe .the statute as to render it constitutional if it is reasonably susceptible to such interpretation. State v. Profaci, 56 N. J. 346, 350 (1970). There is no doubt that the statute as it is applied to plaintiff’s telephone operators is reasonably related to a valid state interest. The case of United Interchange, Inc., v. Spellacy, 144 Conn. 647, 136 A. 2d 801 (Conn. Sup. Ct. Err. 1957), cited by plaintiff, is inapposite.

YI

Por the reasons expressed herein, plaintiff’s motion for summary judgment is denied, and defendant’s motion for summary judgment is granted.


author: Martino, A. J. S. C.

text:
    TOWNSHIP OF NEW HANOVER ET AL., PLAINTIFFS, v. EDWARD A. KELLY, JR., BURLINGTON COUNTY CLERK, ET AL, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided November 2, 1972.

      Mr. Joseph F. Polino for plaintiffs (Mr. James Logan, Jr., attorney).

      G. Robert Wills, Deputy Attorney General, for defendants (Mr. George F. Kugler, Jr., Attorney General, attorneys).
   Martino, A. J. S. C.

Fort Dix and McGuire Air Force Base extend into five separate municipalities located in Burlington County. These municipalities are New Hanover Township, North Hanover Township, Pemberton Township, Springfield Township and Wrightstown Borough. The plaintiff, New Hanover Township, has registered to vote in the 1972 General Election 241 voters. The population according to the 1970 Census is 27,410. It must be assumed that the major portion of its population consists of military personnel. The disparity between the number of registered voters and the population may be caused by many factors •which do not necessarily indicate a lack of voting interest.

On September 5, 1972 the Attorney General of the State indicated to the county boards of elections of this State that military service voters as defined in N. J. S. A. 19:57-2, who were in the armed forces or working for the military, mast be allowed, if they wish, to register and vote for all elective offices in the municipality in which they physically reside. That it was immaterial whether the individual lives in a dwelling located on the government reservation or in an adjacent community. That registration for voting for President and Vice-President closes 30 days before the November 7, 1912 election, while registration for voting for all other candidates closes 40 days before the election. The Attorney General made it clear that persons in the military service or civilians living on Federal Government reservations must be allowed to participate in the state and local elections of the area in which they resided as long as they were bona fide residents of that area.

Plaintiff New Hanover Township has raised several arguments as reasons for this court to declare that the directive of the Attorney General is arbitrary and capricious; that it has no rational connection to any legitimate interest of residents of Fort Dix and the McGuire Air Force Base in the affairs of government in said municipality; that it violates the right of the individual plaintiffs, namely Patrick Malloy and Benjamin Hance, to the equal protection of the law as guaranteed by the Fourteenth Amendment to the Constitution of the United States; that plaintiffs have an overriding interest to restrict the right to vote in New Hanover Township local elections to those who are primarily or substantially interested and affected by electoral decisions at the local level; that military personnel do not have a stake equal to those residents in the operation of the local government; that the power to tax does not exist over military personnel, nor can it enforce its ordinances upon the military personnel; that Art. II, par. 5 of the New Jersey Constitution (1947) does not permit military personnel stationed in the military reservation to be considered as residents of this State.

However, it must be conceded that if elected representatives enact new state criminal laws or sanctions, or make changes in those presently in effect, the changes apply equally to persons within the federal enclave. Under the Federal Assimilative Crimes Act, 18 U. S. G. § 13, “Acts not punishable by any enactment of Congress are punishable by the then effective laws of the State in which the enclave is situated.” United States v. Sharpnack, 355 U. S. 286, 287, 78 S. Ct. 291, 292, 2 L. Ed. 2d 282 (1958). Congress has permitted the states to levy and collect their income tax, gasoline, sales and use taxes—the major sources of state revenue—on Federal enclaves. 4 U. S. C. §§ 104-110. State unemployment laws and workmen’s compensation laws likewise apply to persons who live and work in federal areas. 26 U. S. C. § 3305; 40 U. S. C. § 290.

It is impossible to predict at this time the extent of the effect of the directive on the number of persons who will be eligible to vote in future elections in New Hanover Township. While those qualified to vote in the 1972 election is 241, it must be conceded that if the directive is upheld the township should expect a greater increase in elections to come. What portion of the population can qualify in the future will have to be conjectural. It has been stipulated that of the 241 registered voters, 17 reside on the military reservations of Fort Dix or McGuire Air Force Base.

.It must be conceded that the directive could create a problem which plaintiffs never conceived would arise in view of the interpretation that was placed upon the status of military voters in the past.

Efforts to prevent residents of federal enclaves from voting in states in which they are geographically located are not new. See Adams v. Londeree, 139 W. Va. 748; 83 S. E. 2d 127 (Sup. Ct. 1954); Rothfels v. Southworth, 11 Utah 2d 169, 356 P. 2d 612 (Sup. Ct. 1960); Evans v. Cornman, 398 U. S. 419, 90 S. Ct. 1752, 26 L. Ed. 2d 370 (1970).

A state does have an interest in limiting the franchise to bona fide members of the community, but this does not justify or explain the exclusion from the franchise of persons, not because their bona fide residence is questioned but because they are recent rather than long time residents. Dunn v. Blumstein, 405 U. S. 330, 92 S. Ct. 995, 31 L. Ed. 2d 274 (1972).

Eesidents of a federal reservation or enclave located within the geographical boundaries of a county in the State of Maryland were not excluded from the right to vote, and the court there said:

In nearly every election, federal, state, and local, for offices from the Presidency to the school board, and on the entire variety of other ballot propositions, appellees [residents] have a stake equal to that of other Maryland residents. [Evans v. Cornman, supra]

In Carrington v. Rash, 380 U. S. 89, 85 S. Ct. 775, 13 L. Ed. 2d 675 (1965), a provision of the Texas Constitution prohibited “[a]ny member of the Armed Forces of the United States” who moves his home to Texas during the course of his military duty from ever voting in any election in that state “so long as he or she is a member of the Armed Forces.” The provision in our Constitution reads:

“No person in the military, naval or marine service of the United States shall be considered a resident of this State by being stationed in any garrison, barrack, or military or naval place or station within this State.” [Art. II, par. 5]

Article II, supra, of our State Constitution concerns “Elections and Suíferage,” and a restrictive construction of Art. II, par. 5 would clearly intimate that for the purpose of voting, a person in the military service who is stationed here does not acquire a residence for voting. In effect the objective might be construed to be the same as the Constitutional provision passed upon in Carrington v. Rash, supra, and declared to be invalid.

For plaintiffs to argue that the constitutional provision is being violated would do them no good, for if the court were to determine that the provision would bar any military personnel from qualifying as a voter, the court would, under Carrington, supra, be required to invalidate the constitutional provision for its invidious discrimination. The better construction, however, would be that a person "stationed” in a military base, because of that fact alone, would not qualify such an individual to vote until and unless he can prove his presence in the enclave for the durational period provided by other provisions of the State Constitution. Art. II, par. 3(a)(b)(c), as amended by the 26th Amendment of the United States Constitution.

In the construction of constitutional limitations courts are enjoined, as in the case of statutes, to collect the sense and meaning of the particular clause by comparing one part with another and by considering all the parts as a whole and not one part as a separate and independent provision bearing no relation to the remainder. The thing sought in the exposition of a constitutional provision is the intent of the people, and in the absence of ambiguity calling for permissible extrinsic aids, this is to be found in the instrument itself. John S. Westervelt's Sons v. Regency, Inc., 3 N. J. 472 (1950); State v. Murzda, 116 N. J. L. 219 (E. & A. 1936).

Many of the arguments made in the case before this court were made in Carrington, supra, in which case the constitutional provision was declared to be invalid, viz, a base commander who opposes local police administration or teaching policies in local schools might influence his men to vote in conformity with his predelictions; local bond issues may fail and property taxes stagnate at low levels because military personnel are unwilling to invest in the future of the area, and the transient nature of members of the military subject to transfer at any time.

To forbid a soldier ever to controvert the presumption of nonresidence imposes an invidous discrimination in violation of the 14th Amendment since there is no indication in the Constitution of the United States that occupation affords a permissible basis for distinguishing between qualified voters within the state. Gray v. Sanders, 372 U. S. 368, 380 (1963).

The Civil Rights Act of 1964, as amended, provides that in determining whether any individual is qualified under stale law or laws to vote in any election, the officials shall not apply “any standard, practice, or procedures different from the standards, practices, or procedures applied under such law or laws to other individuals.” 42 U. S. C. A. § 1971(a)(2)(A). Though it has generally been dealt with in racial contexts, its sweeping terminology suggests application to discrimination in student and other nonracial contexts. Worden v. Mercer County Board of Elections, 61 N. J. 325, 333 (1972).

Chief Justice Weintraub, in his concurring opinion in Worden, supra, clearly enunciated a principle which should be controlling here.

A student, and a non-student as well, who satisfies the durational requirement, may vote where he resides without regard to the duration of his anticipated stay or the existence of another residence elsewhere. It is for him alone to say whether his voting interests at the residence he selects exceed his voting interests elsewhere. [Emphasis added.]

Since this court concludes there is no merit in plaintiffs’ attack on the directive of the Attorney General, the motion for summary judgment in favor of defendants is granted and the motion in favor of plaintiffs is denied.


author: Egan, J. C. C.

text:
    RONALD E. GIBBINS AND HARRIET M. GIBBINS, PLAINTIFFS, v. VINCENT KOSUGA AND PAULINE KOSUGA, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided November 2, 1972.

      Mr. Lewis P. Dolan, Jr. for plaintiffs (Messrs. Dolan and Dolan, attorneys).

      Mr. Richard H. Hughes for defendants (Messrs. Silverman, Weber & Hughes, attorneys).
   Egan, J. C. C.

(temporarily assigned). This action for breach of contract and misrepresentation, with a counterclaim on a note, presents the unusual picture of a suit instituted in March 1971 on a transaction occurring in May 1961, approximately ten years earlier. Needless to say, the statute of limitations was urged to defeat both the complaint and the counterclaim. The procedural context of the case gives it a somewhat distinctive twist.

The history of the dispute follows. Defendants were the owners of a tract of land in Frankford Township, Sussex County, New Jersey, where they built a dwelling which they conveyed to plaintiffs. Closing took place on May 11, 1961. The price was $16,500, of which $15,000 was paid by plaintiffs in cash and through the proceeds of a mortgage loan they obtained from a local bank. Defendants took back a promissory note for the $1,500 balance payable on September 1, 1961, approximately 3y2 months later.

The note was not paid when due, and still has not been paid, but defendant vendors never instituted suit thereon.

Plaintiffs lived uneventfully on the property for about seven years and then moved to another home, leasing these premises to tenants who vacated in September 1970. At about that time plaintiffs had contracted to sell the property to a third party. The prospective purchaser had a survey made, disclosing for the first time that the well supplying water to the dwelling was not located on the property but on that of a neighbor. An easement to.continue using the well being unobtainable, plaintiffs were required to have a new well dug around October 1970 at a cost of $1,498.50 in order to consummate the sale of the property.

Plaintiffs’ action for breach of contract and misrepresentation is based on their claim that prior to the 1961 sale to them, defendants had represented in effect that there was a well included as part of the deal. Defendants denied initially that any such representation was expressly articulated. The need to resolve such a fact issue was, however, eliminated at trial when the defendant Vincent Kosuga testified quite candidly that, although he had no recollection of what might have been discussed more than ten years ago, he certainly thought the well was located within the boundaries and he sold the house on the belief that it had its own water supply. The court therefore, as finder of the fact, has no problem with the conclusion that the agreement between the parties included a water supply.

In answer to plaintiffs’ action for the $1,498.50 cost of the new well, defendants initially denied the allegations of the complaint and pleaded the affirmative defense that the complaint was barred by the statute of limitations. They later filed an amended answer, adding a counterclaim for the $1,500 which was never paid on plaintiffs’ note of May 11, 1961. (The mere $1.50 difference between the complaint and the counterclaim is a curious, but apparently genuine, coincidence.)

The distinctive twist is that plaintiffs urge that their claim is not barred by the statute of limitations but that defendants’ counterclaim is. The distinction, they assert, is that although both causes of action are governed by the six-year statute, N. J. S. 2A:14-1, it is not a bar to their own claim because under the so called “discovery” rule, the running of the statute against them was tolled for almost ten years until they first learned of the absence of the well.

On the theory that no such saving grace is available to defendants, plaintiffs made a motion for summary judgment dismissing the counterclaim solely on the grounds of the statutory bar. This motion was granted by Judge Gascoyne. Thereafter the matter was pretried but, with reference to legal issues, no mention was made in the pretrial order of the promissory note or, for that matter, defendants’ own plea of the statute of limitations and plaintiffs’ contention re its tolling.

When the ease came on for trial defendants argued that, even though their counterclaim had been dismissed as an affirmative claim, they still should be allowed to set it up by way of set-off or recoupment against plaintiffs’ claim. Plaintiffs responded, first, that set-off or recoupment did not appear as an issue in the pretrial order. Secondly, they urged that, under the doctrine of res judicata or collateral estoppel, Judge Gascoyne’s dismissal of the counterclaim foreclosed defendants from attempting to revive the same issue by way of set-off or recoupment. Thirdly, they urged that N. J. S. 2A:14-27 prohibited defendants’ use of the statute of limitations by way of set-off because defendants’ claim on the note was for liquidated damages and the cited section very specifically states:

The limitations provided by this chapter shall apply to the case of any debt or demand for liquidated damages alleged by way of set off.

Given this background, is there an inequity or anomaly in making the statute of limitations available to protect one party to a transaction while simultaneously denying its protection to the other party in precisely the same transaction? We must begin by accepting as a fact a very real discrepancy between the durability of the identical statute of limitations as applied to the two parties to this transaction. The nature of plaintiffs’ cause- of action is such that the statute does not begin to run until they discovered that they had suffered a legal wrong. New Market Poultry Farms, Inc. v. Fellows, 51 N. J. 419 (1968). They had no reason to know of the lack of their own water supply until 1970. They could not be charged, therefore, with sleeping on their rights ' until they had reason to know those rights had been violated. Plaintiffs’ affirmative claim therefore was not barred ten years after consummation of the contract which gave rise to it.

What about defendants’ counterclaim on the note? Clearly, they knew precisely when it was due. They let the due date pass, and well over six years beyond it without making any claim. Clearly, the statute of limitations was properly invoked to dismiss their counterclaim. Dismissal of the counterclaim, as such, was proper. But if defendants could not use plaintiffs’ obligation as a sword, must it follow that they could not use it as a shield? The answer lies in an analysis of the use to which they sought to put the plaintiffs’ debt. And this involves an understanding of the logical and historical distinctions in counterclaims, set-offs and recoupments. A counterclaim is an affirmative effort to enforce or collect upon an affirmative claim, and as already indicated, had been forever forfeited by defendants and foreclosed by Judge Gascoyne’s order of dismissal.

Our attention must therefore first be directed to- the difference between set-off and recoupment, and second, to whether either is available to defendants. They are alike in that they are both mechanisms of defense; they differ in their operative availability.

Recoupment differs from set off mainly in that the claim must grow out of the identical transaction that furnishes the plaintiff’s cause of action and, being in the nature of a claim of right to reduce tlie amount demanded, can be had only to an extent sufficient to satisfy the plaintiff’s claim. In other words, recoupment goes to the justice of the plaintiff’s claim, and no affirmative judgment can be had thereon, while set off is not necessarily confined to the justice of such particular claim, and an affirmative judgment may be had for any amount to which the defendant established his right over and above the amount to which the plaintiff has proved he is entitled. [Grand Rapids v. McCurdy 136 F. 2d 615 (6 Cir. 1943)].

20 Am. Jur. 2d, Counterclaim Recoupment and Setoff, § 11. See also, Annotation, 1 A. L. R. 2d 630.

Almost the identical issue was presented to the court in Atlantic City Hospital v. Finkle, 110 N. J. Super. 435 (Cty. Ct. 1970). Plaintiff hospital had sued defendant, a former patient, for services rendered, well within two years after their cause of action accrued. Defendant was allowed to file an answer and counterclaim for personal injuries long out of time, more than a year and a half after the suit had been instituted. By this time defendant’s counterclaim against the hospital was well beyond the two-year period for bringing such an action. The hospital moved for summary judgment dismissing the counterclaim as barred by the statute of limitations. The court denied the motion. However, the opinion was explicit in limiting its holding to the facts of that case where the counterclaim asserted a recoupment which was not barred “as of the time when the principal action was commenced” even though when actually filed it would have been barred as an independent action.

The question now before this court, therefore, goes just a step further and asks whether a stale claim can be used by way of recoupment if it was already barred as of the time the principal action was commenced. The fact that recoupment seeks the reduction of a claim because of an offsetting claim arising out of exactly the same transaction would seem in logic and in equity to justify treating it differently than a set-off which seeks a reduction because of an offsetting claim arising out of a totally unrelated transaction. To hold differently would be to permit the inequity of one party to a transaction demanding full performance from the other while refusing to perform fully itself.

Again, because of the distinction between set-off and recoupment, the provisions of N. J. S. A. 2A:14-27 do not become operative. They refer to “liquidated damages alleged by way of set-off.” Defendants’ claim on the note is for liquidated damages but it does not originate as a set-off.

Plaintiffs’ argument that the summary judgment dismissing the counterclaim creates a collateral estoppel or res judicata barrier to the use of the unpaid note merely as a defense by way of recoupment is without merit. True, the order dismissing the counterclaim will forever and everywhere preclude defendants from affirmatively seeking to recover on the note. But the court never adjudicated defendants’ substantive rights under it. It determined only that they had forfeited their remedy to collect it. The case of Washington Tp. v. Gould, 39 N. J. 527 (1963), is. readily distinguishable. Involved therein was a second attempt to litigate the constitutionality of a zoning ordinance completely prohibiting trailer parks after the court had previousty held it constitutional. Plaintiffs here rely on the language of the court when it stated that where a judgment of a court of competent jurisdiction directly determines a right, question or fact distinctly put in issue, such judgment estops the parties or their privies from thereafter re-litigating the same issue in a subsequent proceeding between them, regardless of its nature ox form. But the dismissal of defendants’ counterclaim here was simply an adjudication that the statute of limitations deprived them of a remedy. It did not “directly determine a right, question or fact distinctly put in issue” in connection with the note. Defendants’ substantive rights on the note were not put in issue. No substantive fact concerning the validity, execution, or consideration for the note were put in issue. The court never got beyond checking the due date on the note against a date on the calendar six years later to determine whether defendants’ affirmative claim had been asserted within the statutory period. This perfectly proper but nevertheless perfunctory examination of the note cannot set up a collateral estoppel to defeat defendants’ right of recoupment.

The least troublesome of plaintiffs’ arguments to exclude the defense of recoupment is the failure to include it in the pretrial order. To begin with, R. 1:1-2 permits a relaxation of the rules “to secure a just determination.” The court is not unmindful of the importance of the pretrial order and the philosophy explained in Lertch v. McLean, 18 N. J. 68 (1955), and repeated in Muntz v. Newark City Hospital, 115 N. J. Super. 273 (App. Div. 1971). It does not commend the somewhat casual manner in which defendants approached the pretrial, at least as disclosed by their pretrial memo. On the other hand, defendants’ efforts to use the promissory note as some form of defense did not come to plaintiffs as a bolt out of the blue. It was not an “afterthought,” as in Muntz. And unlike the situation in Lertch, there will very clearly be real harm suffered by the defendants in this case if they cannot use the note for the very limited purpose of recoupment. They would be exposed to the patent inequity of having to pay $1,498.50 to someone who allegedly owes them $1,500. Presumably mandatory rules can be relaxed when “enforcement would be inconsistent with substantial justice,” as for example in allowing the defense of contributory negligence even when it has not been pleaded as mandated by R. 4:5-4. Douglas v. Harris, 35 N. J. 270 (1961).

Only one point remains to be clarified. Plaintiffs' attorneys suggested they might wish to present evidence to meet the defense of recoupment and show why the note was not paid if the court allowed this defense. Under the cir.cumstances, plaintiffs should have that opportunity if in fact they seek it. Plaintiffs therefore will be allowed two weeks from the receipt of this decision within which to request a hearing on the reasons for not paying the note. To the extent that those reasons are valid and proper, defendants' right of recoupment would be abated proportionately. If no such application is made within two weeks, a judgment will be entered in favor of defendants.


author: Wood, A. C., J. C. C.

text:
    THE SINGER COMPANY, A NEW JERSEY CORPORATION, PLAINTIFF, v. LARRY K. GARDNER, DEFENDANT.
    District Court, Burlington County
    Decided October 27, 1972.

      Appearances:

      Messrs. Dimon, Haines & Bunting (Mr. William R. Wood appearing) Attorneys for Plaintiff;

      Messrs. Farr, Brandt, Haughey & Penberthy (Mr. David A. Kasen appearing) Attorneys for Defendant.
   Wood, A. C., J. C. C.

This is an action in replevin in which plaintiff The Singer Company seeks judgment for possession of certain articles of merchandise sold to defendant, and by way of damages, the balance of the purchase price of said articles allegedly remaining due and unpaid. Defendant denies any indebtedness to plaintiff. He contends that the agreement between him and plaintiff be declared void as unconscionable and by reason of the exaction of wrongful charges by plaintiff in violation of the Retail Instalment Sales Act, N. J. S. A. 17:16C-1 et seq. By way of counterclaim defendant demands damages for the alleged wrongful seizure by plaintiff of the goods in question.

On January 15, 1969 defendant purchased from plaintiff a sewing machine for the agreed purchase price of $400. lie paid $65 down on account of the purchase price with the balance to be paid in instalments. A sales slip was prepared setting forth the sale, the price (plus sales tax of $12), the down-payment, the balance of $347 remaining due, and showing the “agreed monthly payment” as $14.

On January 31, 1969 defendant signed a “Singer Credit Application” setting forth on the face thereof personal data usually called for on such applications. On the reverse of said application form there appears in reasonably legible type an agreement headed “The Singer One to Thirty-six Credit Plan Agreement.” This agreement sets forth the terms of instalment payments made on this so-called “credit plan.”

On or about February 8, 1969 defendant purchased a Singer U-43 vacuum cleaner for the sum of $70. The sales slip covering the transaction indicates a payment of $2.10 on account (the amount of the sales tax), a balance due of $70 and agreed monthly payments of $15.

On May 21, 1969 defendant purchased two more vacuum cleaners, a U-43 model for $69.95 and a C—10 model for $79.95, a total purchase price of $149.90. This sales slip showed payment of $4.50 (the amount of the sales tax), the balance of $149.90, and no amount of agreed monthly payments.

Defendant made monthly payments on account of these purchases until July 1969. Thereafter payments were made sporadically until April 24, 1971, when a payment of $100 was made, bringing the amount paid on account to a total of $469. No payments on account were made thereafter. Certain attempts at collection by representatives of plaintiff having been unsuccessful, this action in replevin was instituted by the filing of the complaint on July 13, 1971. A writ of replevin was issued and there were seized thereunder the sewing machine and two vacuum cleaners. No notice of the repossession was given to defendant.

The sewing machine was resold by the plaintiff on April 4, 1972 for $172.95. One U-43 vacuum cleaner was resold on May 27, 1972 for $7.99. No notice was given to defendant of the resales and it is to he noted that such sales were prior to the entry of any judgment in this action. There is no evidence as to whether the resale prices represented the then fair market value of the goods sold. In any event, defendant was credited with the sum of $180.94 realized from the repossession sales. Plaintiff has thus credited defendant with payments totalling $469.60 and proceeds of resales in the sum of $180.94, making total credits of $650.64. The other vacuum cleaner seized under the writ of replevin has not been sold and nothing is credited to defendant by reason of its repossession.

It is to he noted that while the complaint alleges sale of two vacuum cleaners to defendant, the evidence and testimony disclose the sale of three vacuum cleaners, one February 8, 1969 and two on May 21, 1969. Defendant testified that he paid cash in full for the vacuum cleaner purchased in February. The records produced by plaintiff indicate no such payment. Defendant says he was given a receipt for the purchase. He did not produce such receipt, saying he gave it to his mother in Philadelphia for whom he bought the machine. I conclude that the sale in question was not a cash sale as contended by defendant. Defendant claims that he made certain payments with which he was not credited. I find that such payments are not established and I conclude that the charges and credits as stated by plaintiff must be accepted as correct.

Plaintiffs claim against defendant, then, is summarized as follows:

TOTAL CHARGES.

Purchases $619.60

Sales taxes 18.60

Service charges 228.87

(time-price differential)

Credit life insurance 3.27 $870.64

TOTAL CREDITS.

Payments $469.60

Proceeds from repossession sales 180.94 650.54

TOTAL DUE $220.10

Defendant contends that the transactions were retail instalment sales, and fall within the provisions of the Retail Instalment Sales Act, N. J. S. A. 17:16C-1 et seq. He contends that defendant violated the provisions of the act in that:

(1) The contract failed to set forth the particulars required by N. J. S. A. 17:16C-27.

(2) The effective interest, or time-price differential, amounts to an annual rate of 18%, although such interest or time-price differential is limited by the act to 10%, N. J. S. A. 17:16C-41.

(3) Particulars as to separate items were not set forth in additional statements annexed to the contract, as required by N. J. S. A. 17:16C-28.

(4) Defendant was not informed as to allocation of payments or balances due on individual items, as required by N. J. S. A. 17:16C-29.

Defendant therefore urges that the contract be held unconscionable and void, and thus unenforceable under N. J. S. 12A:2-302.

Plaintiff concedes that the provisions of the Retail Instalment Sales Act, including the limitation of 10% on the time-price differential, have not been complied with. It contends, however, that these transactions are not retail instalment sales but are “retail charge account” sales, and do not come within the provisions of the act. The principal issue in this ease is whether the transactions are retail instalment sales subject to the provisions of N. J. S. A. 17:16C-1 et seq.

Defendant also contends that the seizure of the goods by plaintiff under the writ of replevin was wrongful since it was made without notice or an opportunity by defendant to be heard, and that the replevin statute is unconstitutional. Cf. Fuentes v. Shevin, 407 U. S. 67, 92 S. Ct. 1983, 32 L. Ed. 2d 556 (1972).

• Instalment and conditional sales contracts, providing for the payment of an amount in excess of the purchase price for the privilege of paying such price in instalments (commonly referred to as a “credit service charge” or “time-price differential”) have long been recognized as distinct from loans and thus to be exempt from the limitations of the usury statute, N. J. S. A. 31:1—1 et seq., the rationale of this distinction being that they are not contracts for the “hire of money,” wherefor the usury statute does apply. That such distinction may leave consumers and purchasers of goods on credit in a position highly vulnerable to excessive charges has been increasingly recognized, and, since 1948, the Legislature has addressed itself to the problem of retail credit buying, Sieffenauer v. Mytelka & Rose, Inc., 87 N. J. Super. 506 (Ch. Div. 1965). In 1960 it adopted the Retail Instalment Sales Act, N. J. S. A. 17:16C-1 to 60, for the purpose of protecting consumers from abuses by retail sellers respecting charges for making instalment purchases. By N. J. S. A. 17:16C-1(b), a “retail instalment contract” is defined as follows:

“Retail installment contract” means any contract entered into in this State between a retail seller and a retail buyer evidencing an agreement to pay the retail purchase price of goods or any part thereof, in 2 or more installments over a period of time, and pursuant to which title to or a lien upon the goods is retained or taken by the retail seller for the payment of the retail buyer’s obligation.

The act sets forth, among other things, detailed requirements as to the information to be included in retail instalment sale contracts, including the cash price, the down payment, the cash balance, the amount of the official fees, the principal balance, the time price differential, the time balance, the number of instalments and the amount and due date of each instalment. It further provides that the time-price differential shall not, for goods other than automobiles, exceed the rate of 10% per year.

By N. J. S. A. 17:16C—29 the act provides that where subsequent purchases are added to the original agreement, payments thereafter shall be considered as allocated among all purchases; and before repossessing any goods for default the seller must actually allocate all payments. Any goods which have been fully paid for are the absolute property of the buyer and not subject to repossession for any subsequent default.

No reference was made in the act to forms of deferred payment for merchandise not coming within the above definition. However, a distinction was recognized between retail instalment sales as defined in the act and retail charge account or revolving credit plans adopted by many large retail merchandisers such as department stores; and the restrictions applicable to retail instalment contracts were held not to apply to retail charge account transactions, although these are obviously simply another form of time-price differential financing. In Sliger v. R. H. Macy & Co., 59 N. J. 465, 467 (1971), the operation of such an account is described as follows:

[The customer] presents Ms charge card and the sale is recorded for billing purposes subject to the prior agreement. The purchase is recorded on the customer’s account and a monthly statement is mailed to him while there remains an unpaid balance. It is understood that the customer may pay the unpaid balance of his account in full within 27 days of the monthly statement sent to him and thereby avoid a finance charge; he may pay installments over a longer period in accordance with the payment schedule determined by the size of his balance. The minimum monthly payment is 10% of the balance due. In exercising his choice to pay over the longer period the purchaser agrees to pay a “finance charge” of 11/2% per month.

The Supreme Court in Sliger, while recognizing and upholding the revolving charge account sales there considered, also recognized the apparent need for further control and regulation of this type of transaction and noted that legislation dealing with same was even then before the Legislature.

Such legislation was enacted in 1971, in the form of amendments to the Retail Instalment Sales Act, which specifically defined and distinguished retail charge accounts and limited the time-price differential to be exacted thereunder to 11/2% per month on the first $700. of such accounts and 1% per month on the excess. However, these amendments had not been enacted when the transactions here considered took place, and plaintiff can hardly contend that they are applicable to these transactions. But plaintiff does argue that they evince legislative recognition and tacit approval of retail charge accounts as described in Sliger, supra. It argues that these transactions were retail charge account transactions and must be upheld as valid accordingly.

There are, it appears, two principal differences between retail instalment sales and retail charge account (or retail credit card) transactions.

1. In charge account transactions the customer is not bound to a rigid payment schedule, as is the case in instalment sale contracts. Rather, the customer pays a minimum amount each month and is charged at the monthly rate on the balance. But, in retail charge accounts, the customer may avoid any charge by paying the balance currently due within the billing period, whereas this privilege is not accorded in retail instalment transactions in which the entire time balance must be paid whether in a lump sum or over the full period of the contract.

2. In instalment sale transactions the seller retains property rights in the goods sold, together with the right of repossession in the event of default until the full time balance is paid. This is not usually true of retail charge account sales.

Let us, then, examine the contract here at issue.

1. The customer is issued a “Singer Credit Card.” The card is to remain “the property” of Singer and is to be returned by the customer upon “termination” of the account.

2. Payments are to be “the larger of” the agreed monthly payment or “the company’s minimum monthly payment listed on an annexed schedule.” The scheduled monthly payment does not decline as the unpaid balance is reduced.

3. Title to the goods purchased remains in the company until the unpaid balance of each separate purchase is fully paid. The goods may not be encumbered or disposed of without the consent of the seller.

4. In the event of default in payment the entire unpaid balance shall, at the seller’s option, become immediately due and is to be paid on demand or the seller may “in the manner and as provided by law, retake any goods not then paid for” and pursue other remedies, including recovery of attorney’s fees.

It is readily apparent that the transaction or transactions described and called for by this contract were the very type of transaction which the Retail Instalment Sales Act is designed to cover. It follows that they were retail instalment sales and as such are covered by the act. The use of the device of a “'credit card” was a subterfuge designed to avoid the provisions of the act and enable the seller to impose a time-price differential greater than that permitted by the act. It is noteworthy that the purchaser was given no option as to any method or plan of payment. He did not go to Singer with the intent of opening a continuing charge account like those employed by department and variety stores. He desired to purchase a number of major appliances and to pay for them in instalments. He was tenderd the application which ho completed and was then sold the merchandise as a “credit card” customer. He was, in effect, forced into a form of transaction which he neither requested nor understood. Moreover, he was never furnished the information required by N. J. S. A. 17:16C-27—particularly the amount of the time-price differential and the amount of the time balance on his purchases. When he defaulted in payments it might well be that the purchase price of at least one of the vacuum cleaners had been paid, or very nearly paid, in full. No effort was made to determine this, and he was given no opportunity to redeem any of the items repossessed. This is in violation of N. J. S. A. 17:16C-29. Moreover, a contract which keeps a balance due on every item until all items, whenever purchased, are liquidated, is unconscionable. Williams v. Walker-Thomas Furniture Co., 121 U. S. App. D. C. 315, 350 F. 2d 445 (1965).

I therefore conclude:

1. The transactions were retail instalment sales and were governed by the Retail Instalment Sales Act.

2. The so called “Credit Card Plan” was a subterfuge, designed to enable Singer to evade the provisions of the Retail Instalment Sales Act.

3. In the crucial respects mentioned plaintiff violated provisions of the Retail Instalment Sales Act to the severe detriment of defendant.

It follows that the contract must be declared unconscionable, and as such void and unenforceable. N. J. S. A. 12A:2-302. It remains therefore to determine the consequences in the light of this conclusion.

Plaintiff, under its writ of replevin, repossessed the sewing machine and two vacuum cleaners. The sewing machine and one vacuum cleaner have been resold. One vacuum cleaner remains in the possession of plaintiff. The third vacuum cleaner was not replevied and presumably remains in the possession of defendant. Defendant demands damages on his counterclaim for the unlawful seizure of the property. However, defendant had possession and, of course, the use of all the goods for 2years prior to their seizure. His payments were admittedly sporadic and in default. I conclude that there is no means of fairly assessing damages in favor of defendant and against plaintiff and that the solution which will most nearly do substantial justice as between the parties is to leave them where they stand. Accordingly, judgment will be entered dismissing the complaint and likewise dismissing the counterclaim.

In the light of these conclusions I do not consider it necessary further to consider the constitutionality of the Replevin Act, N. J. S. A. 2A:59-1 et seq. Cf. Grossman Furniture Co. v. Pierre, 119 N. J. Super. 411 (Cty. D. Ct. 1972).

Judgment accordingly. No costs.