author: Wicic, J. S. G.

text:
    FRANCIS B. McMENAMIN AND ROSE M. McMENAMIN, HIS WIFE, PLAINTIFFS, v. EVESHAM MUNICIPAL UTILITIES AUTHORITY, A PUBLIC BODY CORPORATE AND POLITIC UNDER N. J. S. A. 14 B-4, 5 AND 6, IN THE TOWNSHIP OF EVESHAM, BURLINGTON COUNTY, NEW JERSEY, DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided January 7, 1969.

      Mr. Joseph 8. Georgiana for plaintiffs (Messrs. Gapehart & Scatehard, attorneys).

      Mr. James M. Davis, Jr. for defendant (Messrs. Powell and Davis, attorneys).
   Wicic, J. S. G.

This matter involves cross-motions for summary judgment in order to determine whether, under New Jersey law, a municipal utilities authority has the power to shut off the water supply to an owner’s premises in order to compel the payment of arrears due from a former owner. The relevant facts are undisputed and are set forth below.

Defendant Evesham is a municipal utilities authority established pursuant to N. J. S. A. 40 :14B-1 et seq. Plaintiffs Mr. and Mrs. Francis 13. McMenamin are the present owners of the premises known as 25 Princess Avenue, in Evesham Township, New Jersey. They acquired title to these premises on August 2, 1965 by a deed from Evesborough West Corporation for a purchase price in the amount of $13,990. Before making settlement the purchasers employed a title company for the purpose of obtaining a tax search pertaining to the premises, which search dated July 22, 1965, did not reveal any recorded lien with respect to the water and sewer charges.

Two years later, on October 20, 1967, the purchasers received a letter from the Evesham Municipal Utilities Authority advising them that the prior owners had not paid the water and sewer bills for the years 1963, 1964 and part of 1965, in the sum of $160.74, and stating that subsequent purchasers were responsible for the payment of such charges. It is not disputed that the McMeuamins did not contract for such water and sewer services during the years in question, nor were they owners or occupants of the premises when the services were provided. Furthermore, at the time the McMenamins purchased the premises they had no knowledge or notice of such unpaid charges.

On September 23, 1968 the authority sent another letter to the McMenamins demanding payment of the unpaid charges and threatening to discontinue water service if payment was not made. Thereafter the McMenamins filed this suit to enjoin the authority from discontinuing the water and sewer service to their premises.

Under R. R. 4:58-3 a party is entitled to a summary judgment when the pleadings, depositions and affidavits on file show palpably that there is no genuine issue of material fact and the party is entitled to judgment as a matter of law. In this case, since the facts are not in dispute, the issue remaining for determination by the court is which party is entitled to judgment under the law.

It is well settled that in the appropriate circumstances a court of equity has the power to enjoin a municipal authority or private water company from shutting off a consumer’s water service inasmuch as irreparable damage to the consumer might otherwise result. McDowell v. Avon-By-The-Sea Land and Improvement Co., 71 N. J. Eq. 109 (1906) ; Home Owners’ Loan Corp. v. City of New Brunswick, 124 N. J. Eq. 305 (E. & A. 1938).

The circumstances in which a municipality (or here, a municipal authority) is justified in terminating a consumer’s water service are strictly circumscribed by statutory and common law principles. The general rule followed in New Jersey is that in the absence of a statutory or contractual basis or a valid lien on the premises, a municipality or private water company may not discontinue water service to a property in order to coerce the present owner into paying charges incurred by a former owner for service rendered before the present owner acquired title. McDowell v. Avon-By-The-Sea Land and Improvement Co., supra; Home Owners’ Loan Corp. v. City of New Brunswick, supra; Millville Improvement Co. v. Millville Water Co., 92 N. J. Eq. 480 (1921); Howe v. City of Orange, 70 N. J. Eq. 648 (1905); Sims v. Alabama Water Co., 205 Ala. 378, 87 So. 688, 28 A. L. R. 463; 19 A. L. R. 3d, 1227, 1251.

McDowell v. Avon-By-The-Sea Land and Improvement Co. involved a suit by hotel owners to restrain a private water company from cutting off the water supply to the hotel. The water company threatened to do so because of the failure of a previous owner to pay arrears of water rents. The court held that in the absence of any statute authorizing termination o£ service or making arrearages a lien on the lands, the private water company’s regulation which authorized a shut-oÍÍ was unreasonable as impairing the subsequent beneficial use of property by requiring a subsequent owner to perform obligations of a former owner. See also Vanderbilt v. Hackensack Water Co., 113 N. J. Eq. 166 (1933).

In Home Owners’ Loan Corp. v. City of New Brunswick, supra, the court held that status of the municipality with respect to its supplying water to properties outside the city limits was that of a private water company. Therefore under the statute the municipality had no lien or other basis for authorizing the termination of water service where the present owner refused to pay the arrears of water charges owing from a previous owner.

In Howe v. City of Orange, supra, a property owner sought to enjoin the municipality from shutting off the water where a former owner had failed to pay water rents. The municipality acted pursuant to a statute, Act of 1876 (1 Gen. Slat. p. 649, § 10), which provided that in case prompt payment of any water rents shall not be paid when they become due, the water shall be shut off from the premises in question. On the basis of that statute the court held the municipality’ had the right to shut off the water from the premises and the suit to enjoin was dismissed. I feel that the crucial difference exists between the statute relied upon in Howe and the statute applicable in the instant case. The former legislation (since repealed) contained no provision granting a bona fide purchaser of property the right to take free and clear of an unrecorded municipal lien arising from unpaid water charges. On the other hand, N. J. S. A. 40: 143-42 provides that a subsequent bona fide purchaser shall not be bound or affected by such an unrecorded lien.

The statutory provision upon which the authority bases its right to shut off the McMenamins’ water service is N. J. S. A. 40:143-43. Since the Municipal Authorities Act is a fairly recent statute and has been the subject of very little judicial review, several relevant provisions of the act should be reviewed.

The basic authority for the imposition of water service charges and sewerage charges by a municipal utilities authority are found in N. J. S. A. 40 :14B-21 and 22. Pursuant to these sections water and sewer charges may be charged and collected from any person contracting for such connection or use or services, or from the owner or occupant, or both of them, of any real property which directly or indirectly is or has been connected with the system. N. J. S. A. 40:14B-41 authorizes the collection of interest at the rate of 1% per month on service charges which are not paid as and when due. N. J. S. A. 40:14B-42 to 47 sets forth the remedies available to the authority for the purpose of enforcing the payment of unpaid charges. First, N. J. S. A. 40 :14B-42 provides that a lien should attach to the premises where the service charges remain unpaid. Second, N. J. S. A. 40 :14B-46 authorizes the authority to institute court proceedings to recover unpaid charges or to foreclose any lien on the property. Third, N. J. S. A. 40 :14B-43 and 44, the provisions which the authority relies on here, give the authority the power to shut off the water for nonpayment of water and/or sewer charges. N. J. S. A. 40 :14B-43 provides in pertinent part:

1 “In the event that any service charge of any municipal authority with regard to any parcel of real property shall not be paid as and when due, the municipal authority, may, in its discretion, enter upon such parcel and cause any connection * * * to be cut and shut off until such service charge * * * shall be fully paid to the municipal authority.”

The authority takes the position that the right to terminate water service which is expressly granted by the above provision is an in rem remedy available by way of self-help, and that the existence and availability of this remedy is in no way negatived or limited by any of the other provisions (i.e., N. J. S. A. 40:14B-42) of the statute. As support for this latter proposition the authority relies on N. J. S. A. 40:145-47, which states that all remedies granted in the act for the collection and enforcement of service charges are to be cumulative and concurrent.

On the other hand, the McMenamins contend that the authority’s remedy of discontinuing water and sewer to their premises where the water charges of prior owners remain unpaid should not apply to them for the reason that they are subsequent bona fide purchasers of the premises. The McMenamins rely on N. J. S. A. 40:145-42, which provides in pertinent part:

“In the event that a service charge of any municipal authority with regard to any parcel of real property owned by any person * * * shall not be paid as and when due, the unpaid balance thereof and all interest accruing thereon shall be a lien on such parcel. * * * Such Hen shall not hind or affect a subsequent hona fide purchaser of such parcel for a valuable consideration without actual notice of such lien, unless the municipal authority shall have filed in the office of the collector or other officer of said municipality charged with the duty of enforcing municipal liens on real property a statement showing the amount and due date of such unpaid balance ® (Emphasis added)

Under the facts in this case there is no question that the McMenamins were bona fide purchasers for valuable consideration, that they had no actual notice of the lien, and that the authority did not file a statement with respect to the unpaid charges for 1963, 1964 or 1965. For several additional reasons I feel that the authority cannot at this time exercise its statutory right to shut off water service against the McMenamins.

First, a reasonable construction of the Municipal Utilities Authorities Act requires that all provisions of the statute be construed together, and each must be considered in light of and in harmony with all the other provisions. Febbi v. Board of Review, Division of Employment Security, 35 N. J. 601, 606 (1961); Brewer v. Porch, 93 N. J. Super. 66, 72 (Ch. Div. 1966); 82 C. J. S. Statutes § 345, p. 696.

If the authority in this case can utilize the shut-off remedy against a bona fide purchaser, then the effect of the provision of N. J. S. A. 40:14B-49 dealing with the rights of a bona fide purchaser are nugatory. Under this section the bona fide purchaser takes the premises free and clear of an unrecorded municipal lien. Absent such a lien on the premises, the authority has no legal basis, in contract or otherwise, for employing the shut-off remedy against the subsequent bona fide purchaser. In light of this, the statutory construction asked for by the authority would have unconstitutional overtones.

An additional consequence of adopting the interpretation asked for by the authority is that the title company or purchaser of real estate would find it necessary to obtain formal verification from the authority that all water and sewer charges are paid up to date (where the unpaid charges are not recorded as a lien). As a practical matter, the cost of title insurance to the innocent purchaser would probably be increased to cover the verification. The imposition of such a burden is not warranted under the present statute.

Finally, I should point out that in this ease the equities weigh heavily in favor of the purchaser inasmuch as the municipal authority failed to enforce payment for three years, failed to file its lien and failed to notify the subsequent purchaser until 1967.

For the foregoing reasons, a summary judgment in favor of the purchasers is granted.


source: Caselaw Access Project

author: Milhed, J. O. G.

license: Public Domain

text:
    SOUTH SHORE NATIONAL BANK, A NATIONAL BANKING CORPORATION, PLAINTIFF, v. MARK M. DONNER, BETTE S. DONNER, RUTH SATSKY JEWELRY AND JULES BRUSKIN, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided January 7, 1969.

      Mr. William Furst, attorney for defendants Ruth Satsky Jewelry and Jules Bruskin.

      Mr. Samuel A. Qennel, attorney for plaintiff [Mr. William D. Bierman, appearing).
   Milhed, J. O. G.

(temporarily assigned). Defendants Ruth Satsky Jewelry, a corporation, and Jules Bruskin move for a summary judgment in their favor against plaintiff South Shore National Bank, contending that plaintiff has no legal right to maintain its suit against them.

The action was instituted by plaintiff bank against tlw defenc'lants Mark M. Donner, Bette S. Donner, Ruth Satsky Jewelry and Jules Bruskin for, among other things, the recovery of -$7,000 paid by the plaintiff (payor bank) to the Donners (payees) on a check drawn on plaintiff bank by the Quincy Mutual Fire Insurance Company, payment having been made by the bank over the stop payment order of the drawer insurance company.

It is undisputed that on December 35, 1961 the Donners sustained a burglary loss while insured under a policy covering theft of personal property issued by the Quincy Mutual Fire Insurance Company of Quincy, Massachusetts; that among the documents submitted by the Donners to the insurance company in connection with their proof of loss was an appraisal of certain items of jewelry and silverware made by defendant Jules Bruskin, president of defendant Ruth Satskv Jewelry; that these defendants knew that the appraisal was being prepared for the claim of Mark M. Donner and Bette S. Donner to their insurance carrier, Quincy Mutual Fire Insurance Company, in connection with their burglary loss; that in payment of this claim the insurance company (Quincy) issued to the Donners its check in the amount of $7,000, dated March 2, 1965 and drawn on plaintiff bank; that thereafter Quincy issued to plaintiff bank an order to stop payment on this check; that the Donners were notified of the stop payment order, but that nonetheless the check was presented for payment and payment thereon was made by plaintiff bank.

Plaintiff contends that after the check of March 2, 1965 was issued, Quincy discovered that the Donners had willfully overvalued the stolen property listed in their proof of loss; that on March 8, 1965 Quincy issued to it an order to stop payment on the check; that on or about March 12 the Donners were notified that payment on the check had been stopped and the reasons therefor, but that nevertheless, in May of 1965, they presented the check for payment and it was mistakenly paid by plaintiff bank over the stop payment order.

Defendants Ruth Satsky Jewelry and Jules Bruskin were brought into the suit in two counts of the complaint: the sixth count, which alleges that they conspired with the Donners to defraud Quincy by knowingly preparing false estimates of the value of property for which claim was made upon Quincy; and the seventh count, which contends that by reason of the alleged conspiracy plaintiff bank is, in accordance with N. J. S. A. 12A :4-407, subrogated to the rights of Quincy against defendants.

In his affidavit in support of the motion for summary judgment defendant Jules Bruskin acknowledges that on or about January 4, 1965 he prepared on the letterhead of Ruth Satsky Jewelry an appraisal of certain items of jewelry and silverware in connection with the burglary loss alleged to have been sustained by the Donners for submission to their insurance carrier (Quincy); that Quincy settled the loss claim submitted to it by the Donners and issued to the Donners its settlement check in the amount of $7,000; that Quincy issued an order directing plaintiff (payor bank) to stop payment on the cheek; that plaintiff nonetheless failed to honor the stop-payment order and made payment on the check to the Donners; that he and Ruth Satsky Jewelry did not receive any pajunent or other valuable consideration from the Donners or from anyone for the preparation of the appraisal, nor did they receive any portion of the proceeds of the $7,000 check.

in memoranda submitted in support of the motion for summary judgment it is contended that section 4-407 of the Uniform Commercial Code “Bank Deposits and Collections” (N. J. S. A. 124:4-407) is the controlling statute; that this section limits plaintiff’s cause of action as against parties to the check who would otherwise be unjustly enriched ; that the only such parties in the case who can be unjustly enriched are defendant payees Mark M. Donner and Bette S. Donner; that neither Euth Satsky Jewelry nor Jules Bruskiu was a “holder of the item” within the meaning of this term as used in subsection (c) of N. J. S. A. 124 :4-407, and that accordingly there is no statutory or common law basis for the maintenance of the action as against defendants Euth Satsky Jewelry and Jules Bruskin.

My analysis of the cited section (N. J. S. 124 :4~407) and other provisions of the Uniform Commercial Code which must be read in conjunction with it reveals no such restriction on its application. It is a basic principle of statutory construction that statutes “in pari materia are to be construed together as forming one act,” Pondelick v. Passaic County, 111 N. J. L. 187, 193 (Sup. Ct. 1933), and “so as to effectuate the general legislative policy,” Scaluorchio v. Jersey City Incinerator Authority, 14 N. J. 72, 85 (1953) ; and see Miller v. Board of Chosen Freeholders, Hudson County, 10 N. J. 398, 413 (1952). “[E]very word must be given full force and effect if possible,” Lynch v. Borough of Edgewater, 8 N. J. 279, 286 (1951). The sense of a law is to be gathered “from its object and the nature of the subject matter and the whole of the context and the acts in pari materia. Tire parts of a statute are to be viewed in relation to the whole, and the motive which led to the making of the law, and reconciled, if possible, to carry out the reasonably probable legislative policy.” Hackensack Water Co. v. Ruta, 3 N. J. 139, 147 (1949) ; and Giles v. Gassert, 23 N. J. 22, 33-34 (1956). “The principle that statutes in pari materia should be construed together is merely an extension of the principle that all parts of a statute should be construed together * * *” 2 Sutherland, Statutory Construction (3rd ed. 1943), § 5205, p. 544, and “each part or section should be construed in connection with every other part or section so as to produce a harmonious whole.” Ibid., § 4703, at p. 336.

Section 4-407 of the Uniform Commercial Code (N. J. S. 12A:4-407) provides that:

“If a payor bank has paid an item over the stop payment order of the drawer or maker or otherwise under circumstances giving a basis for objection by the drawer or maker, to prevent unjust enrichment and only to the extent necessary to prevent loss to the bank by reason of its payment of the item, the payor bank shall be subrogated to the rights
(a) of any holder in due course on the item against the drawer or maker; and
(b) of the payee or any other holder of the item against the drawer or maker either on the item or under the transaction out of which the item arose; and
(c) of the drawer or maker against the payee or any other holder of the item with respect to the transaction out of which the item arose.”

This section is broader in scope than the prior subrogation statute, N. J. S. A. 17:94-225 (D) (4), which apparently served as its model and was repealed by the enactment of the Uniform Commercial Code, e. g., including within its coverage not only payments made over stop payment orders but also payments made, “under circumstances giving a basis for objection by the drawer or maker.” See N. J. S. 124 :10-105 and New Jersey Study Comment 2 under N. J. S. A. 124 :4-407.

Other sections of the Uniform Commercial Code bearing upon the bank’s rights as against all defendants in the present case are sections 1-102, 1-103, 1-201(36), 3-401, 3-418 and 4-403. (N. J. S. 124:1-102, 1-103, 1-201(36), 3-401, 3-418 and 4-403).

Section 1—102 mandates a liberal construction of the Uniform Commercial Code and its application to promote its underlying purposes and policies. Section 1-103, A. J. 8. 12A :1—103. states that:

“Unless displaced by the particular provisions of this Act, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause shall supplement its provisions.”

In regard to this section, Uniform, Commercial Code Comment 5 under N. J. S. A. 12A :4.-407 points out that “The spelling out of the affirmative rights of the bank in this section does not destroy other existing rights (Section 1-103),” including “rights to recover money paid under a mistake.” Similarly, Uniform, Commercial Code Comment 8 under N. J. S. 12A :4-403 points out that:

“A payment in violation of an effective direction to stop payment is an improper payment, even though it is made by mistake or inadvertence. Any agreement to the contrary is invalid under Section 4-103(1) if in paying the item over the stoi> payment order the bank has failed to exercise ordinary care. The drawee is, however, entitled to subrogation to prevent unjust enrichment (Section 4~ 407) ; retains common-law defenses, * * * and retains common-law rights, e. g., to recover money paid under a mistake (Section 1-103) in eases where the payment is not made final by Section 3-418.”

Section 1-201(36), N. J. s. 12A :1-201(36), defines “rights” to include “remedies.”

Of course it is obvious that the payment by plaintiff bank in this case was not made final by section 3-418. That section, among other things, specifically excepts from its operation “recovery of bank payments as provided in the Chapter on Bank Deposits and Collections (Chapter 4).” Turning to section 3-401(1), which provides that “No person is liable on an instrument unless his signature appears thereon,” Uniform Commercial Code Comment 1 under N. J. 8. A. 12A :3-401 aptly points out in part that “Nothing in this section is- intended to prevent any liability arising apart from the instrument itself. The party who does not sign may still be liable * * * in tort for misrepresentation * * The remaining related section referred to above, i. e., section 4—403, relates to the customer’s right to issue to his bank a binding order to stop payment of any item payable for his account.

The gravamen of the sixth and seventh counts of the complaint in this action is an alleged conspiracy among defendants to defraud the Quincy Mutual Eire Insurance Company by means of ““false estimates of the value of property for which claim was made upon the said insurance company.” Here it is accordingly alleged that the defendants’ tortious actions combined to produce a single indivisible result, i. e., issuance of the check of $7,000 by Quincy to the Dormers. In such circumstances, joinder of the defendants would be sanctioned even under the strict common law rules limiting joinder of defendants in actions sounding in tort ““to cases of concerted action, where a mutual agency might be found.” See, Prosser, Torts (3rd ed., 1964) § 44, p. 260. The joint alleged responsibility of the defendants to Quincy would be apparent and ““the identity of the cause of action against each defendant” would be entirely clear. Ibid., p. 260. See also Judson v. Peoples Bank & Trust Co. of Westfield, 17 N. J. 67, 82-83 (1954). And see Judson v. Peoples Bank & Trust Co., 25 N. J. 17, 29 (1957), wherein it is pointed out that ““A person is liable with another if he “knows that the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself * * *.’ 4 Restatement, Torts (1939), sec. 876 (b).”

It is evident from an analysis of the related sections of the Uniform Commercial Code referred to above that by section 4r-407, as supplemented by the broad provisions of section 1-103, the Legislature intended to grant to a payor bank which has mistakenly paid an item over the stop-payment order of the drawer or maker, a full and effective remedy by way of subrogation to the rights and remedies of the drawer or maker against the payee as well as those who have, by their tortious acts in concert with him, combined to produce the single indivisible result, e. g., the issuance of the item to the payee, the remedy being furnished not only to prevent unjust enrichment but also to the extent necessary to prevent loss to the bank by reason of its payment of the item. See New Jersey Study Comment 1 and 2 under N. J. S. A. 12A :4-407. Comment 1 states in part that “subrogation, in the case of the improperly paid check, permits the bank to step into the position of the person receiving payment, the pa)ree, some other holder, or the drawer,” and Comment 2 points out in part that section 4-407 would not permit a bank to subrogate “unless some party has been 'unjustly enriched/ ”

While the remedy afforded by section 4-407 is in part expressly directed to the prevention of “unjust enrichment,” nowhere in the statute is there any requirement that all of the defendants who may be joined in the action be “unjustly enriched.” The reasonable implication is that the Legislature intended that the remedy granted be comprehensive and effective. See 3 Sutherland, Statutory Construction (3rd ed. 1943), § 5402; Juzek v. Hackensack Water Co., 48 N. J. 302, 314—315 (1966); and Giles v. Gassert, supra, 23 N. J., at pp. 33-34.

The editorial staff of the Banking Law Journal, in commenting on the objective of section 4-407, concisely pointed out that “The aim of the Code provision is clear enough: the payor bank by paying over a stop order would hare paid out its own money and would be given remedies to make itself whole.” “Stopping Payment of Cheeks,” 79 Banking L. J. 204 (1962). See also, Clarke, Bailey & Young, ALI-ABA Bank Deposits and Collections, 159 (1963) ; and Rapson, “Article 4 — Bank Deposits and Collections,” 17 Rutgers L. Rev. 79, 101 (1962).

It is not contended that the movants, Ruth Satsky Jewelry and Jules Bruskin, have in any way changed their position in reliance on the bank’s payment of the check. Nor is there any suggestion that any injustice is done to them by the subrogation. Their position is the same as it would have been had they been impleaded along with the Donners as third-party defendants in an action by Quincy against the bank to have its account recredited. In such litigation the burden would be upon Quincy to establish the fact and amount of loss resulting from the payment of the check over the stop-payment order. See N. J. S. 12A :A-403. See also, Editorial Staff of the Banking Law Journal, “Stopping Payment of Checks,” 79 Banking L. J. 203-205 (1962); and Tradesmen’s Building &c. Ass’n v. Thompson, 32 N. J. Eq. 133, 135 (Ch. 1880).

Subrogation, “an ancient equitable device to compel the ultimate discharge of an obligation by one who in good conscience ought to pay it,” George M. Brewster & Son, Inc. v. Catalytic Const. Co., 17 N. J. 20, 28 (1954), “is highly favored in the law,” Standard Accident Ins. Co. v. Pellecchia, 15 N. J. 162, 171 (1954), and “the tendency is to extend rather than restrict its application,” 2 Lawrence, Equity Jurisprudence, § 622, p. 708 (1929). “It is a right of ancient origin, having been imported from the civil law to serve the interests of essential justice between the parties,” Standard Accident Ins. Co. v. Pellecchia, supra, at p. 171, and although of equitable origin and enforced on equitable principles “recovery is generally sought at law,” Ibid., at p. 172. See also, 4 Pomeroy, Equity Jurisprudence (5th ed. 1941), §§ 1416 and 1419, pp. 1070, 1072-1074. Considering the nature of the allegations contained in the sixth and seventh counts of plaintiff’s complaint, the remedy in this case should be most extensive. As pointed out in 3 Pomeroy, Equity Jurisprudence (5th ed. 1941), § 918, at p. 601, “The remedy which equity gives to the defrauded person is most extensive. It reaches all those who were actually concerned in the fraud * *

Similarly governed by equitable principles is the right to recover money paid under mistake, particularly where, as here, it is alleged that the mistake was induced by inequitable conduct of the payees (in presenting the check for payment after being notified that payment had been stopped and the reasons therefor) and it is not contended that defendants have changed their position in reliance on the payment made. While “the action to recover back money paid by mistake is a very familiar one at law,” 3 Pomeroy, op. cit., § 869, at p. 382, the “right to recover is governed by principles of equity * * * Ibid., note 13, at p. 382. See also Ibid., § 870a, at pp. 388-389; 5 Williston, Contracts (rev. ed. 1937), § 1574, pp. 4400-4404, and § 1598, at p. 4453; 3 Blackstone, Commentaries (Lewis ed., 1922), 163, at pp. 1154-1155) ; Great American Ins. Co. v. Yellan, 58 N. J. Super. 240, 244-245 (App. Div. 1959), and Young v. State Farm, etc., Ins. Co., 80 N. J. Super. 582, 585 (App. Div. 1963). In discussing remedies available for mistake, Professor Corbin points out, in part that:

“The court must be acutely aware of tlie wide extent of its powers and of the variety and flexibility of its remedies. Mould the decree so as to fit the mistake and to correct its unjust results, giving-due consideration to the situation as it now exists, to changes of position, to the character of each party’s conduct, and to the rights and interests of third parties, * * *•” Corbin on Contracts, (One vol. ed., 1952), c. 29, § 613, at p. 568.

See also, 1 Pomeroy, op. cit., § 114, pp. 152- 153.

Plaintiff’s claims for recovery of the $7,000 which it paid on the check rest comfortably within the ambit of each of these two expansive remedies. Plaintiff hank having requisite standing to maintain this suit, the factual issues between the parties, including the strongly contested charge of conspiracy to defraud, are for determination at a plenary trial. R. R. 4:58; and see Judson v. Peoples Bank & Trust Co. of Westfield, supra, 17 N. J., at p. 76. The motion for summary judgment is accordingly denied.


author: Beckett, J. C. C.

text:
    THANET CORPORATION, A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF, v. THE BOARD OF ADJUSTMENT OF THE TOWNSHIP OF PRINCETON, W. JOSEPH SHINN, BUILDING INSPECTOR OF THE TOWNSHIP OF PRINCETON AND THE TOWNSHIP COMMITTEE OF THE TOWNSHIP OF PRINCETON, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS.
    Superior Court of New Jersey Law Division
    Decided January 9, 1969.

      Mr. Garrett M. Ileher for plaintiff (Messrs. Smith, Stratton, Wise Ileher, attorneys).

      Mr. Henry A. Hill, for defendants Board of Adjustment and W. Joseph Shinn (Messrs. Mason, Griffin and Moore, attorneys).

      Mr. Ivan G. Bash for defendant Township Committee.
   Beckett, J. C. C.

(temporarily assigned). On April 4, 1967 plaintiff Thanet Corporation executed an assignable ground lease agreement between it, as lessor, and the United States of America, acting through the Post Office Department, as lessee. The lease was for the establishment of a postoffiee for a 20-year term, renewable for a maximum of seven successive five-year terms at the option of the Post Office. The land is located in the Engineering Research District (ENG) of Princeton Township.

In June and July of 1967 plaintiff filed two alternative applications with defendant board of adjustment which sought (1.) a special permit, or (2.) a (d) variance, and, in both eases, a (c) variance from the lot width requirements. On September 7, 1967 defendant board denied the applications but took no action as to the (c) variance.

On October 20, 1967 plaintiff brought an action in lieu of prerogative writs against the board of adjustment, the building inspector, and the Princeton Township Committee. On December 1, 1967, plaintiff filed an amended complaint which sought by its first count a reversal of defendant board and the building inspector in denying the application for a (c) variance, and, in the alternative, a (d) variance or special permit for the establishment of a postoffice. The second count sought a declaration that the establishment of the general postoffice will, for so long as said tract is actually used by the U. 8. Post Office Department or its assignee as a general postoffice facility, be immune from and not subject to any of the zoning ordinances of Princeton Township.

Both the plaintiff and defendant township committee have moved for summary judgment.

On August 8, 1968 the United States of America, through the Post Office Department, signed the lease and addendum.

The first issue presented is whether or not the establishment of a postoffice facility is immune from the zoning ordinances and regulations of Princeton Township. Eurthermore, if the Government is clothed with immunity, does it extend to its leases with private individuals or corporations ?

It is to be noted that if the two foregoing issues are answered in the affirmative, it renders moot the propriety of the actions by the board of adjustment, the building inspector and the township committee.

Article I, Section 8 of the United States Constitution provides that “the Congress shall have power * * * to establish Post Offices * *

Pursuant to this, Congress adopted Title 39 of the 27. 8. Code which establishes the Post Office Department, with the Postmaster General at its head, and authorizes him to establish such postoffices as he deems necessary. 39 27. 8. 0., § 701 et seq. Chapter 23 of Title 39 gives the Postmaster General authority to acquire property and, in particular, 39 U. 8. C., §§ 2102 and 2103 authorize the Postmaster General to lease property for postoffices for a term not to exceed 20 years. No provision of Title 39 provides that the use of any property for a postoffice, whether leased or owned, must comply with any municipal or state requirements with regard to such use.

As was said in Thornton v. Village of Ridgewood, 17 N. J. 499 (1955) :

“The need of a public building in a certain location ought to be determined by the federal, state or municipal authority, and its determination on the question of necessary or desirable location cannot be interfered with by a local zoning ordinance.” (at p. 513; emphasis added)

In Aviation Services v. Board of Adjustment, Hanover Township, 20 N. J. 275 (1956) the court stated:

“* * * where the immunity from local zoning regulation is claimed by any agency or authority which occupies a superior position in the governmental hierarchy, the presumption is that sxich immunity was intended in the absence of express statutory language to the contrary, (at p. 282; emphasis added)

In the present case, as can be seen from the foregoing, there is nothing contained in Title 39 of the U. 8. G. which dissipates this immunity. Therefore, the question that remains is whether this immunity extends to situations where the Government does not own the land but leases it.

On this point, defendant township committee cites Mayor, etc. of Baltimore v. Linthicum, 170 Md. 245, 183, 531, 533 (Ct. App. 1936), which seems to be directly on point with the present case. In that case the applicant owned a lot in a residential use district which the applicant leased to the United States for a substation postoffice. The opinion deals with Maryland procedure and res judicata and then, as dictum, goes on:

“* * * Specifically, contentions of the owner * * * that application of restrictions of the zoning ordinance of the city would be an unlawful regulation of property of the United States, or interference with the mails, are, in the opinion of this court, closed oontentions on the appeal. With respect to this last contention, it may be observed that the property is not owned by the United States; there is only a lease limited to ten years’ duration, or the duration of appropriations for rentals, and the lessee has only such property rights as may be derived from the owner. * * ® The property is not, therefore, within the exclusive jurisdiction of the United States under the United States Constitution, art. 1, § 8. * * * Any interference of the local police regulations with the mails would he, at most, an indirect one, and to pass on the objection on that ground we should have to consider the rule and the decisions on local regulations interfering only incidentally with federal powers. * * * We do not pass on it because it is foreclosed as stated.” (Emphasis added)

Our own Court of Errors and Appeals, in Tim v. City of Long Branch, 135 N. J. L. 549, 554 (E. & A. 1947), decided a case analogous to the present one. In that ease, the United States of America acting through the National Housing Agency pursuant to the Lanham Act, leased a private home for a period of seven years in order to renovate the home to provide 15 apartments for emergency housing facilities. The municipal ordinance permitted the renovations only if they contained not less than three nor more than six apartments. The court held that' the use of the house by the Government pursuant to the lease was not subject to the zoning requirements of the municipality, principally because the federal statute which authorized the lease of the premises for that purpose provided that the Federal Housing Agency had to consult with local public officials and comply with zoning requirements “so far as may be practicable.”

The rationale of the Tim case was:

“* * * The United States Constitution expressly confers on Congress extensive powers to wage war. Article I, Section 8, Clauses 11 to 16, inclusive. The legislation enacted pursuant to these powers becomes the supreme law of the land and supersedes state and local laws in contravention thereto. Article VI, United States Constitution. McCulloch v. Maryland, 4 Wheat., U. S. 316, 4, L. Ed. 579.” (Emphasis added)

Crivello v. Board of Adjustment of Borough of Middlesex, 183 F. Supp. 826 (D. C. N. J. 1960), is another case quite similar to the present one. There the Post Office Department planned to erect a postoffice building on a site not owned by it but apparently leased from the owner, and successfully received a building permit and a variance from the municipal hoard of adjustment. A resident of the municipality attacked the grant of the variance in a prerogative writ action in the Superior Court of New Jersey, Law Division, and the United States Attorney removed the action to the Federal District Court. Chief Judge Smith remanded the action to the state court for reasons concerned solely with the requirements of federal removal jurisdiction. In the course of his opinion, Judge Smith held as follows;

“It is alleged by the plaintiffs that the defendant 'National Bank of New -Jersey is the owner of the proposed site and this allegation is not denied. We note, however, that if the Postmaster General, pursuant to and in the exercise of the authority vested in him by congressional enactment, contemplates the erection of a post office on the proposed site, his authority may not be restricted, by local ordinance. Tim v. City of Long Branch, 135 N. J. L. 549, 53 A. 2d 164, 171 A. L. R. 320; United States v. City of Chester, 3 Cir., 144 F. 2d 415; United States v. City of Philadelphia, D. C., 56 F. Supp. 862, Aff. 3 Cir., 147 F. 2d 291. A resort to the municipal hoard of adjustment would be unnecessary under such circumstances.” (at p. 829; emphasis added)

The most recent pronouncement on the question here presented is the 1965 New York Supreme Court ease of Incorporated Village of Minneola v. Robert Michael Realty Corp. N. Y. L. J., Dec. 7, 1965, p. 19. In that case, the village sought an injunction against an owner of property within the village boundaries to prevent the use of the premises in violation of the zoning ordinance. The premises were leased to the Government for postoffiee purposes. The village claimed that the zoning ordinance was violated in that it was contemplated that designated areas on the premises would be used for parking and not for the maneuvering of trucks, and that the postoffice is operating around the clock every day of the week. The court denied the injunction, stating in part of its opinion:

“A village is not subject to zoning restrictions in the performance of its governmental, as distinguished from its corporate and proprietary activities [citation omitted] and of course this is so because in that aspect of its activities it takes on the immunities of a sovereign. It would seem to follow quite naturally that the state and Federal Government would enjoy the same immunities. (Tim v. City of Long Branch, 135 N. J. L. 549, 53 A. 2d 164; cf. Mayo v. United States, 319 U. S. 441, 63 S. Ct. 1137, 87 L. Ed. 1504).”

Prom the foregoing this court concludes that the United States Government, whether as owner or lessee, is immune from local zoning ordinances.

Plaintiff’s motion for summary judgment on the second count is granted. An order including a declaration that the property involved herein is immune from and not subject to any of the provisions of the zoning and land subdivision ordinances of Princeton Township may be entered.


author: Kilkenny, J. A. D. Conpobd, S. J. A. D.

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. LEON K. ALLEN, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued November 12, 1968
    Decided January 13, 1969.
    Conford, S. J. A. D., dissented.

      Before Judges Coneokd, Kilkenny and Leonard.

      Mr. Kenneth 8. Javerbaum, Assistant Deputy Public Defender, argued the cause for appellant (Mr. Peter Murray, Public Defender, attorney).

      Mr. William J. Brennan, III, Assistant Attorney General, argued the cause for respondent (Mr. Arthur J. Sills, Attorney General of New Jersey, attorney).
   The opinion of the court was delivered by

Kilkenny, J. A. D.

Defendant voluntarily pleaded guilt}’' on October 27, 1965 to an indictment charging him with having committed the crime of larceny from the person (N. J. 8. 2A :119-1) on August 22, 1965. He was sentenced on November 18, 1965 to State Prison for a term of not less than six years, nor more than seven years. In addition, he was ordered to pay a fine of $2,000 and to stand committed until tlie fine was paid.

At the time o£ sentence, the State moved to dismiss three other indictments — for robbery, rape and sodomy — which resulted from the same occurrence. The motion was then denied. Subsequently, an order was entered on February 2, 196? dismissing the other three outstanding indictments.

Defendant took no direct appeal from the judgment of conviction. However, sometime later he applied for post-conviction relief, contending that the $2,000 fine violated the due process and equal protection clauses of the Fourteenth Amendment. The matter was heard before the sentencing judge on December 21, 1967 and decided adversely to defendant. An order denying defendant’s application for post-conviction relief was entered on January 16, 1968.

Defendant prosecutes this appeal from that order, as an indigent, with the aid of the Public Defender.

The sole point raised on appeal is that it is a denial of the constitutional guarantees of equal protection and due process of the law, as well as against excessive fines, to sentence an indigent to the maximum term of confinement and a fine, which may readily be paid by a nonindigent but results in further confinement for the indigent because of his inability to pay.

Larceny from the person, N. J. S. 2A :13 9—1, is a high misdemeanor. The punishment for this crime is regulated by A". J. S. 2A :85-6. It is limited to “a fine of not more than $2,000, or by imprisonment for not more than 7 years, or both.” Quite obviously, the sentencing judge in this case imposed the maximum fine and the maximum prison sentence. He had a right to do so, having stayed within the statutory limits.

An appellate court may, nevertheless, revise the sentence if it is manifestly excessive, or unduly punitive in the light of the total circumstances. The power to revise a sentence must be exercised with extreme care. We ought not interfere with the sentence imposed “in the absence of a clear showing of abuse of discretion.” State v. Tyson, 43 N. J. 411, 417 (1964). See, too, State v. Brown, 46 N. J. 96, 108 (1965) ; State v. Ford, 92 N. J. Super. 356, 361 (App. Div. 1966); State v. Johnson, 67 N. J. Super. 414, 424-425 (App. Div. 1961).

We pause at this point to note another important fact, particularly pertinent to the issue presented. The State Parole Board, on March 22, 1968, acted favorably upon defendant’s application for parole. It has granted him parole effective March 4, 1969. However, it notes that the $2,000 fine has not been paid and has made as a special condition of his parole:

“After paying $500.00 of your fine in the amount of $2,000.00 or working $500.00 off in the institution at the rate of $5.00 [a day], you will be released to make weekly payments in the amount of $10.00 to the Passaic County Probation Officer until the balance of the fine is paid in full. Such payments are to begin three weeks after date of parole.”

In effect, defendant will be confined an additional 100 days after March 4, 1969, the effective parole date, unless on or before then he pays $500.

N. J. S. 2A :166—16 provides that a person confined to prison by reason of default in the payment of a fine, who was ordered to stand committed until the fine is paid, shall be given credit against the amount of the fine at the rate of $5 for each day of confinement, after completing his prison sentence. If he is not being held by reason of any other sentence, he shall be discharged when a sufficient number of days of further confinement, at $5 a day, equals the amount due on his unpaid fine.

The Parole Board has the authority under N. J. S. A. 30:4-123.15 to release an inmate on parole, who has failed to pay the fine imposed, “upon condition that such fine and costs, be paid, through the probation office of the county from which the inmate was committed, in weekly amounts, to be fixed by the board.” That authority was exercised in the present ease, except it was subject to the condition that defendant must pay or work off at the $5 a day rate $500 of the $2,000 fine. Obviously, the board, in the sound exercise of its discretion, could have released defendant from prison to pay off the entire fine through the probation office, in weekly amounts fixed by it. That relief may still be sought and granted. However, we shall presume for further discussion that the terms fixed by the Parole Board will remain, and that defendant faces the possibility, if someone does not come to his financial aid by March 4, 1969 with the $300 to pay on account of the fine, to remain confined for another 100 days beyond the effective parole date.

Does such a, further prison confinement to work off a fine at $5 a day deprive an indigent inmate of equal protection or due process of law, or constitute the imposition of an excessive penalty? The Public Defender’s argument is that the poor prisoner must stay in jail for an added period of time, as opposed to the financially able inmate who can buy his release by paying the fine.

Defendant relied upon People v. Collins, 47 Misc. 2d 210, 261 N. Y. S. 2d 970 (Cty. Ct. 1965). Defendant therein was convicted of assault in the third degree and sentenced to the county jail for a term of 11 months and 29 days. The maximum prison sentence for this misdemeanor in New York was one year. He was also fined $250, in default of which lie was to be confined at the rate of $1 a day for each dollar of fine unpaid. lie challenged the validity of his potential confinement for the additional 250 days, maintaining that it was an unjust discrimination against a man without funds. The Orange County Court agreed and struck from the sentence the unpaid fine. It reasoned that the indigent prisoner, unlike one financially able, did not have the power to control or limit the time of his confinement.

A year later, the New York Court of Appeals was faced with this same general problem in People v. Saffore, 18 N. Y. 2d 101, 271 N. Y. S. 2d 972, 218 N. E. 2d 686 (Ct. App. 1966). There, defendant pleaded guilty to a misdemeanor. As noted above, the New York statute fixed a one-year limit as the maximum term of imprisonment for a misdemeanor violation. The trial court,. knowing that defendant was an indigent, sentenced him to one year’s imprisonment and fined him $500, with the proviso that, if the fine were not paid, defendant would be required to serve one day’s imprisonment for each dollar of the fine unpaid. The Court of Appeals held that, when the sentencing judge is cognizant of an individual’s inability to pay a fine, subsequent imprisonment in lieu of the fine, which results in imprisonment for more than the permissible maximum prison sentence, violates the defendant’s right to equal protection and due process of the law and is proscribed by the Eighth Amendment to the United States Constitution.

The rationale of the Saffore decision is that to order a defendant to stay in prison until he pays a fine, when the court knows that he cannot pay it, is not the use of a lawful means for enforcing payment but is an illegal method of requiring imprisonment beyond the maximum term of imprisonment allowed by the statute. It recognized that imprisonment can validly be used as a method of collection for “refusal” to pay a fine, but “it is illegal so to imprison a defendant who is financially unable to pay.” 271 N. Y. S. 2d, at p. 974, 218 N. E. 2d, at p. 687; emphasis added)

To the same effect, and for the same reason, see People v. Mackey, 18 N. Y. 2d 755, 274 N. Y. S. 2d 682, 221 N. E. 2d 462 (Ct. App. 1966), and People v. Tennyson, 19 N. Y. 2d 573, 281 N. Y. S. 2d 76, 227 N. E. 2d 876 (Ct. App. 1967), holding the portion of the sentence, which required defendant to serve out the unpaid fine at $1 per day, illegal and violative of his constitutional rights.

For the contrary view, see Henderson v. United States, 189 A. 2d 132 (D. C. Ct. App. 1963), and McKinney v. Hamilton, 282 N. Y. 339, 26 N. E. 2d 949, 951, 127 A. L. R. 1283 (Ct. App. 1940).

It is important to note, however, that the court said in People v. Saffore:

“We do not hold illegal every judgment which condemns a defendant to confinement if he does not pay his fine. We do hold that, when payment of a fine is impossible and known by the court to be impossible, imprisonment to work out the fine, if it results in a total imprisonment [in excess of that provided by the applicable statute] * * * violates the defendant’s right to equal protection of the law, and the constitutional ban against excessive fines.” (271 N. Y. S. 2d at p. 975, 218 N. E. 2d, at p. 688; emphasis added)

Thus, the declaration of illegality was grounded upon the fact that the additional confinement in jail to satisfy the unpaid fine effected an excess of imprisonment beyond the statutory limit.

The same rationale was employed in Sawyer v. District of Columbia, 238 A. 2d 314 (D. C. Ct. App. 1968).

Recently, in Wright v. Matthews, 163 S. E. 2d 158 (Va. Sup. Ct. App., September 6, 1968), it was held that imprisonment of an indigent defendant for failure to pay court costs violates the prisoner’s rights under the Thirteenth Amendment, which prohibits involuntary servitude.

Running throughout these cases is the common factor that further confinement for default in payment of a fine, or costs, which extends the term of prison commitment beyond the statutory jail limitation, deprives the indigent prisoner of his constitutional rights.

. We have not been referred to any case where confinement by reason of default in payment of a fine, due solely to indigency, has been held unconstitutional, if that additional deprivation of freedom does not extend the imprisonment bej'ond the statutory limit. Rather, the confinement for failure to pay the fine was deemed to be not in violation of constitutional rights under such circumstances. Thus, in United States ex rel. Privitera v. Kross, 239 F. Supp. 118 (S. D. N. Y. 1965), affirmed 345 F. 2d 533 (2 Cir. 1965), cretiorari denied 382 U. S. 911, 86 S. Ct. 254, 15 L. Ed. 2d 163 (1965), Privitera was convicted in New York City Criminal Court for illegal possession of lottery slips. This is a misdemeanor punishable by not more than a year in prison or not more than a fine of $500 or both. Defendant was sentenced to prison for 30 days and fined $500. In the event the fine was not paid, he was to serve an additional 60 days’ imprisonment. Thus, his total possible confinement to jail was 90 days upon his conviction of an offense for which the permissible maximum prison term was one year.

Privitera completed his 30-day direct prison sentence and sought by writ of habeas corpus in the federal court to be released from the additional 60-da,y confinement on his default in paying the fine. He claimed that the additional time to be served violated his constitutional rights secured by the Eighth Amendment and the Equal Protection Clause. The federal court denied the writ. It dismissed defendant’s arguments as lacking in merit. It noted that his imprisonment term would not exceed 90 days — assuming nonpayment of the fine — whereas the trial judge could have justifiably, in his discretion, sentenced defendant to imprisonment for one jrear, within the permissible statutory limit. It found wholly beside the point his contention that lack of funds compelled him to remain incarcerated for another 60 days, while another comdcted of the same crime and given the same punishment might effect his immediate release after the first 30-day period, if possessed of the $500. It observed:

“Since sentences are individualized, it serves no useful purpose to compare the sentence of this defendant with that of another hypothetical defendant.” 239 F. Supp. 320.

In the instant case, the possible confinement of defendant for an additional 100 days to work off the $500 portion of the fine will not result in his imprisonment beyond the maximum statutory prison sentence. Instead of being released on parole on March 4, 1969, he will be detained until June 12, 1969, at most. The seven-year prison sentence imposed in 1965 could have kept him in prison until November 18, 1912. Thus, the evil condemned in People v. Saffore and the similar cases, supra, will not materialize here.

Imprisonment in lieu of the payment of a fine has been a generally accepted rule in this country and in our State. N. J. S. 2A: 166-16, supra, attests thereto. So does People v. Saffore, supra, wherein the court acknowledged, “We do not hold illegal every judgment which condemns a defendant to confinement if he does not pay his fine.” 271 N. Y. S. 2d, at p. 975, 218 N. E. 2d, at p. 688. United States ex rel. Privitera v. Kross, supra, follows the rule.

In State v. Johnson, 30 N. J. Super. 235 (Law Div. 1954), where defendant pleaded guilty to a charge of drunken driving, the court imposed a fiue of $200 and provided that, in default of payment of the fine, defendant should serve 30 dajrs in jail. Defendant failed to pay the fine. It was held that he could properly bo required to serve 30 days in jail. The court observed:

“Committing a prisoner to jail until a fine is paid is no part of the punishment. The penalty, or the punishment adjudged, is the fine, and the custody adjudged is the mode of enforcing the payment of the fine. This is in accordance with the common law.” (Citing, 35 Am. Jur. 184, § 546, at p. 237)

See, too, 21 Am. Jur. 2d 557, § 603, and 36A C. J. S. Fines § 11, p. 443.

In Baucum v. N. J. Parole Board, 68 N. J. Super. 271 (App. Div. 1961), a husband was convicted of refusing to support his destitute wife and children. He was sentenced to a term in State Prison plus a $1,000 fine. He was paroled to pay the fine, in installments. He defaulted. He was returned to prison to “work off” his fine at the rate of $3 per day, as then provided by N. J. S. 2A :166-16. Whether it was defendant’s indigency or wrongful neglect which caused the default does not appear in the opinion. The case is noted only as another example of our established policy of confinement for failure to pay a fine. N. J. S. 2A :164-18 is cited as authority therefor.

Should this court accept defendant’s position that a state may not impose fines on those unable to pay, so long as the penalty for default is imprisonment, a sentence imposing a fine’ upon an indigent would mandate a remand for a corrected sentence. The new sentence might then eliminate the fine but provide for a longer prison term within the statutory limits to offset the elimination of the fine. Such a “right” would be “illusory,” as the court observed in United States ex rel. Privitera v. Kross, supra, 239 F. Supp., at p. 121.

It would seem appropriate to measure a defendant’s ability to pay a fine imposed as of the time when he has served his prison sentence or is eligible for parole therefrom and faces the possibility of further confinement for the unpaid fine. If he is then financially able to pay, there is no reason not to do so. If at that time, he is without funds, there is adequate administrative remedy available to obtain his release on terms fixed by the Parole Board. It is to be presumed that its action will not be arbitrary or capricious. If it is, recourse may be had under B. B. 4:88-8 to this court.

Can we say in this case that the Parole Board was arbitrary when it paroled defendant, effective March 4, 1969, when he might have been detained until November 1972, when only a little more than half of his prison term has been served, even if he is detained until June 1969, another 100 days, because he did not pay $500 on account of his $2,000 fine — a mere one-fourth thereof — and allowed him'almost three years thereafter to pay the $1,500 balance, at $10’ a week ? ' We think such terms were not arbitrary or capricious, but most reasonable and liberal, considering the gravity of the offense and its aggravating circumstances.

It might well be that further investigation of defendant’s financial status as of the effective date of his parole, or shortly prior thereto, might induce the Parole Board to modify further the condition of parole so as to permit his discharge on the effective date upon the payment of the entire fine at a reasonable weekly rate outside prison walls; However, the Legislature has vested that power and diséretion in the Parole Board. We ought not interfere, absent a showing of an abuse of discretion by the Board. No such showring has been made. Certainly, the action taken does not, in any event, confine this defendant beyond the statutory prison sentence limit — the rationale employed in cases such as People v. Saffore, supra. We find it unnecessary under the facts herein to decide whether our courts should subscribe fully to the doctrine that a fine may never be constitutionally imposed upon an indigent, if default in its payment will result in some temporary confinement.

The order under review is affirmed.

Conpobd, S. J. A. D.

(dissenting). I hold the view that subjection of an indigent to incarceration as a purported sanction for failure to pay a fine is unconstitutional both as a denial of equal protection of the laws and a deprivation of liberty without substantive due process. I would therefore reverse the order under review and remand the matter to the trial court with directions to hold a hearing, shortly before defendant’s forthcoming completion of his term of imprisonment, as directed to be shortened by the March 28, 3968 order of the State Parole Board, on the sole issue of his indigency. I would direct that if then found indigent, defendant be released from confinement, subject to payment of the entire fine of $2,000 in installments under the same parole terms as have been fixed by the Parole Board for the payment by defendant of $1,500 of that amount. If, on the contrary, the defendant were at such hearing found not indigent, and able to pay $500, I would permit the order of the Parole Board to stand.

My position in this matter is not in derogation of the general scheme of our penal statutes in providing for both imprisonment and fines as appropriate sanctions for crime and gwrisi-eriminal conduct. I do not entertain the idea that imposition of a fine is ever unconstitutional merely because of the poverty of the miscreant at sentence. However, without arbitrarily keeping an indigent defaulter in jail for no reason other than his sheer inability to pay a fine, the State can, with greatest probability of realizing the payment, release the defendant on parole to pay the fine in reasonable installments pursuant to the enabling provisions of N. J. 8. A. 30:4-123.15. For willful failure to make such payments commitment would follow. Moreover, the State can always avail itself of the statutory remedy of fieri facias to obtain satisfaction of a fine and costs out of any property defendant can at any time be found possessed of. N. J. S. 2A :166—11.

Granting the limited relief outlined above at the behest of one, like defendant, who asserts a right thereto as a matter of constitutional law, would not, of course, preclude the exercise of the option of other indigent defendants who prefer to sit out their fines in jail at the statutory rate of $5 per day and thereby achieve discharge of their pecuniary obligation to the State.

Thus, the continuation of general penological policy that fines be employable as punishment of offenders, even indigent ones, is entirely consistent with this dissent.

The widespread practice of automatic imprisonment of indigent offenders for nonpayment of fines has been roundly deprecated by the leading authorities in this field. “Sentencing Alternatives and Procedures,” American Bar Association Project on Minimum Standards for Criminal Justice (Tentative Draft 1967), p. 285 et seq.; Model Penal Code, §302.2, Proposed Official Draft, (1962); and see Goldberg, “Equality and Governmental Action,” 39 N. Y. U. L. Rev. 205, 221 (1964); Greenawalt, “Survey of Constitutional Law,” 18 Syracuse L. Rev. 180, 193-198 (1966); Note, 64 Mich. L. Rev. 938 (1966); Note, 101 U. of P. L. Rev. 1013, 1021—24 (1953); Note, 1966 U. Ill. L. Forum 460; Note, 81 Harv. L. Rev. 435, 447-8 (1967); Note, 4 Houston L. Rev. 695, 701 (1967).

After citing cases holding that imprisonment for nonpayment of a fine is not part of the punishment for the offense, but only an enforcement device for nonpayment, the Advisory Committee which drew the A. B. A. report on “Sentencing Alternatives and Procedures,” cited above, stated:

“The Advisory Committee would agree with these decisions that imprisonment should be employed only as a method of collecting a fine. It follows from this that imprisonment of an offender xoho does not have the means to pay—barring the rare but not unknown case of the defendant who deliberately deprives himself of the means to pay—should not he tolerated. Provisions which view imprisonment as a routine response to the failure to pay a fine, or whieh view imprisonment as an alternative to the payment of a fine, are thus disapproved.
This does not mean, of course, that jail should never be available when a fine has not been paid. The system proposed by the Advisory Committee can be outlined as follows: in the first place, fines should never be levied unless it is reasonably clear that the defendant is going to be able to pay, either immediately or over time. With respect to defendants who cannot or will not be able to pay, a more appropriate sanction should be chosen. With respect to defendants who appear to be able to pay but ultimately do not, the proposal is that there first should be an inquiry into the reason for nonpayment. Only in the case where such a hearing discloses no ewcu.se for nonpayment would jail he an appropriate response. For this class of offenders, which surely must be small in comparison to the numbers now incarcerated, jail is surely an appropriate remedy— not as an alternative or an equivalent to a fine, but as a device to secure payment or as a sanction for the inexcusable failure to pay.” (at pp. 288-289; emphasis added)

The American Law Institute, in the proposed Model Penal Code, op cÁt., follows the same basic philosophy. Section 302.2(1) provides that upon default by a defendant sentenced to pay a fine he must show cause why his default should not be considered contumacious. Only upon the failure of defendant to show that the default was not attributable to willful refusal to pay or to make a good-faith effort to obtain funds therefor is he eommittable until the fine or a specified part thereof is paid.

In terms of equal protection, it seems to me that preclusion of incarceration for involuntary failure to pay a fine because of poverty is a fair, practicable and logical application of the approach of the line of United States Supreme Court cases following Griffin v. Illinois, 351 U. S. 12, 76 S. Ct. 585, 100 L. Ed. 891 (1956). If, as held therein, the State must provide the poor with the same procedural tools purchasable by the moneyed defendant and essential for effective appellate review of criminal adjudications, I regard it as at least equally requisite that the State provide the poor with the same out-of-prison opportunity to meet the cost of a fine which a moneyed defendant enjoys automatically. As cogently stated by former Justice Goldberg in a recent study of the Equal Protection Clause: “The ‘choice’ of paying a $100 fine or spending 30 days in jail is really no choice at all to the person who cannot raise $100. The resulting imprisonment is no more or no less than imprisonment for being poor, a doctrine which I trust this Nation has long since outgrown.” 39 N. Y. U. L. Rev., op. cit., at 221.

In terms of substantive due process, I regard it as fundamentally unjust to deprive a person of his liberty for no better reason than that he has not at the moment the wherewithal to pay a fine in full — a result recently described aptly by a New York court as “an archaic system akin to imprisonment for debt.” People v. McMillan, 53 Misc. 2d 685, 279 N. Y. S. 2d 941, 943 (Cty. Ct. 1967).

Strong judicial condemnation of the practice of imprisonment of indigents for nonpayment of fines was recently expressed by the New York Court of Appeals in People v. Saffore, 18 N. Y. 2d 101, 271 N. Y. S. 2d 972, 218 N. E. 2d 686 (1966). There defendant, on a plea of guilt of assault, third degree, was accorded the maximum statutory sentence of imprisonment for one year and a fine of $500, with the latter, if not paid, to he served out at the statutory rate of one day in jail for each dollar of fine. The strict holding of the court was that, as applied to an indigent unable to pay the fine, the sentence was illegal as in effect resulting in imprisonment for a period in excess of the maximum term fixed by statute for the crime (here, one year) (271 N. Y. S. 2d, at p. 975, 218 N. E. 2d 686). This was reasoned on the theory that imprisonment in default of fine is not a punishment for the crime but only a sanction to compel payment; and that since that sanction was inherently inoperative as against a defendant unable to pay, its imposition, nevertheless, had the illegal effect of enlarging the penal term beyond the statutory maximum.

The result in Stiff ore was also defended by the court: (1) on “equal protection” grounds (ibid.), which, from the text of the opinion, was based on the ability of a moneyed defendant to avoid the added imprisonment by payment of the fine; and (2) because the fine was an “excessive fine.” The court said:

“Defendant would have us put our decision on constitutional grounds. He argues persuasively that under Griffin v. Illinois, 351 U. S. 12, 76 S. Ct. 585, 100 L. Ed. 891, People v. Pride, 3 N. Y. 2d 545, 166 N. Y. S. 2d 508, 145 N. E. 2d 184, and other similar decisions it is a denial of due process and of equal protection of the law to let a defendant’s lack of money determine how long he must be imprisoned. The man who can pay and the man who cannot are not treated equally. Another specification of uneonstitutionality suggests itself. Section 5 of article I of our State Constitution, like the Eighth Amendment to the Federal Constitution, forbids the imposition of ‘excessive fines.’ There seem to be no controlling decisions on the question of what is an excessive fine (however, see as to ‘excessive bail' as applied to fines, Douglas, J., Cohen v. United States, 82 S. Ct. 526, 7 L. Ed. 2d 518). The phrase ‘excessive fine,’ if it is to mean anything, must apply to any fine which notably exceeds in amount that which is reasonable, usual, proper or just. A fine of $500 for a common misdemeanor, levied on a man who has no money at all, is necessarily excessive when it means in reality that he must be jailed for a period far longer than the normal period for the crime, since it deprives the defendant of all ability to earn a livelihood for 500 days and since it has the necessary effect of keeping him in the penitentiary far longer than would ordinarily be the case.” (271 N. Y. S. 2d, at p. 975, 218 N. E. 2d, at 688)

Safore was followed, in similar fact situations, in People v. Mackey, 18 N. Y. 2d 755, 274 N. Y. S. 2d 682, 221 N. E. 2d 462 (Ct. App. 1966), and People v. Tennyson, 19 N. Y. 2d 573, 281 N. Y. S. 2d 76, 227 N. E. 2d 876 (Ct. App. 1967). The New York Court of Appeals has not yet, apparently, been squarely faced with the question whether imprisonment of an indigent for default of fine is unconstitutional if the resulting aggregate incarceration is less than the statutory maximum. However, a lower court has since invalidated the in-lieu prison term in such circumstances on grounds inclusive of the concept of denial of “equal treatment under the law.” People v. McMillan, supra (279 N. Y. S. 2d, at p. 942). That same court (Orange County Court), prior to the decision in Safore, had reversed the jailing of an indigent for failure to pay a fine of $250, imposed on him along with a prison sentence of 11 months and 29 days, for conviction of assault in the third degree. People v. Collins, 47 Misc. 2d 210, 261 N. Y. S. 2d 970 (1965). Here, too, although the case on its facts fell within the later narrow holding in Safore, the decision was rested on equal protection grounds, the court holding that it could not accept the “equation of one day of a man’s liberty * * * for everyone dollar of the fine.” (261 N. Y. S. 2d, at p. 973). At about the same time Justice Hopkins was expressing the same view in concurring in the Appellate Division decision of People v. Johnson, 262 N. Y. S. 2d 431 (1965).

In Sawyer v. District of Columbia, 238 A. 2d 314 (D. C. Ct. App. 1968), in facts similar to Safore, the court struck down a prison-in-lieu-of-fine provision of a sentence imposed upon an indigent as an abuse of discretion, following the rationale of Safore. The court said:

“* * * [T]he application of the statute to a person known by the court to be indigent does not compel payment of a fine but rather imposes upon him an additional term of imprisonment. This we have said cannot he done since it subverts the legitimate purpose of a valid statute and it is clear that the statute, so applied, would then present the grave constitutional questions argued here.” (at p. 318)

Apparently the only reported decision which, to date, has flatly addressed itself to the issue whether imposition of jail on default of payment of a fine by an indigent constitutes a denial of equal protection where the aggregate resulting period of incarceration does not exceed the statutory maximum, is United States ex rel. Privitera v. Kross, 239 F. Supp. 118 (S. D. N. Y. 1965), affirmed per curiam, o.b., 345 F. 2d 533 (2 Cir. 1965), certiorari denied 382 U. S. 911, 86 S. Ct. 254, 15 L. Ed. 2d 163 (1965). In that case, the facts of which are set forth in the opinion of the majority, the stated issue was resolved in the negative, but on reasoning which most of the commentators on the decision have rejected as unsound (see infra).

The court dismissed the equal protection argument on two basic grounds: (a) its disregard of the trial judge’s right to individualize sentences, thereby precluding the appropriateness of comparison of the sentence of the indigent with that of the moneyed defendant (at p. 120) ; and (b) the illusory nature of the relief defendant would obtain by invalidation of the sentence, since the sentencing court could then impose a straight jail term equal to or exceeding the aggregate of the 30-day term first imposed and the 60 days additional for default in payment of fine (at p. 121). As to (a), I noto and endorse the comment of Professor Gfreenawalt :

“The flaw in Judge Weinfeld’s reasoning is that the trial judge had not exercised his discretion to give the defendant a 90-day sentence or any larger part of a year than 30 days. For whatever reasons, he had thought 30 days appropriate. Yet Privitera was forced to spend 60 days more in jail than other persons with money who, having committed the same offense had also been sentenced to 30 days in jail and a 500 dollar fine. The futility of imprisonment as a device to coerce payment of the fine is just as great as in Saffore and it is also true that ‘the man who can pay and the man who cannot are not treated equally.’ Thus the arguments based on statutory construction and the equal protection clause, which proved determinative in Saffore, are both applicable when the statutory term of imprisonment is not exceeded.”

Making essentially the same point are the comments in 64 Mich. L. Rev., op. cit., at pp. 942-943, and 4 Houston L. Rev., op. cit., at p. 700; see also Comment, 16 Buffalo L. Rev. 428, op. cit.

As for (b), referred to above as the second ground of decision in Privitera, supra, it has no relevancy’ to the merits of the relief I would accord the present defendant. I do not propose that the sentence of the defendant should be set aside — merely that defendant, if found indigent and unable to pay, be relieved of incarceration for involuntary nonpayment of the $500 portion of the fine which the State Parole Board insists be paid in full uj>on conclusion of service of the stated jail term, and be allowed to pay it, as able, in installments. However, I disagree with any intimation in Privitera, if the opinion is susceptible of such a reading, that establishment of the principle I espouse would be futile and would not benefit future criminal defendants because sentencing judges, knowing that fines against indigents would not be automatically transmuted into added periods of incarceration for nonpayment, would simply increase jail terms rather than impose fines as sole or partial punishment. I confidently rest on the presumption that sentencing judges would continue, in good faith, to allocate to every defendant such penal term and such fine, separately, as they regarded as respectively appropriate in the individual case.

The opinion of the majority sets forth no rationale for distinguishing, in equal protection terms, between confinement of indigents for involuntary nonpayment of a fine when, sneh confinement, added to the prison term, would exceed the statutory maximum, and when it would not. I can conceive of none that deserves any weight. The conceded criterion for validity of legislative classification as against attack on equal protection grounds is whether the classification bears any rational relationship to the objects and purposes of the legislation. As recognized in New Jersey, State v. Johnson, supra, and generally, the object of imprisonment for default in payment of a fine is to compel the payment, not to impose added punishment for the crime. From that standpoint, it is equally arbitrary to incarcerate one not able to pay the fine, where such incarceration, although substantial, will not carry the total imprisonment flowing from the sentence beyond the statutory maximum, as in the instance where it will. In both cases there is unjustifiable discrimination in the effect of the statute as between the defendant able to pay the fine and the one who is not.

As 1 see it, therefore, if the “equal protection” position suggested in People v. Saffore, supra, is, as I believe it is, soundly reasoned, then the decision in United States ex rel. Privitera v. Kross, supra, is incorrect.

In the present case, the composite, interacting judgment of the State’s instrumentalities — the court and the State Parole Board — is that defendant’s penal incarceration hy way of punishment for his crime should terminate on parole March 4, 1969. if, on that day, solely because of his indigence, he involuntarily defaults in the payment of $500 of the fine and is required perforce of the statute to serve another 100 days in jail, he will have been subjected to such additional imprisonment not for commission of a crime, but solely for poverty, in derogation of his right to equal protection and to freedom from deprivation of liberty without due process.

The Attorney General’s expressed doubts as to the defendant’s indigence are, to say the least, premature. No issue was raised in that regard at the hearing below, when defendant was represented by assigned counsel. In any event, that question should be remitted for resolution to the hearing which I have indicated above should be held shortly before the effective parole date.

       Our courts are in accord: State v. Johnson, 30 N. J. Super. 235, 237 (Law Div. 1954).

       In this regard see Professor Greenawalt’s supporting observations in the article cited above (18 Syracuse L. Rev., at p. 195).

       Commented upon in 18 Syracuse L. Rev., cited above, at pages 194-198, and in Comment 16 Buffalo L. Rev. 428 (1966), and Comment, 41 St. John’s L. Rev. 628 (1967).

         Those questions were equal protection and excessive fines. 238 A. 2d, at p. 315.

       See “Survey of Constitutional Law,” 18 Syracuse L. Rev., ubi cit., at p. 196.


author: Per Curiam.

text:
    COMMUNITY INVESTMENT CO., A PARTNERSHIP, PLAINTIFF-APPELLANT, v. MAYOR AND TOWNSHIP COMMITTEE OF THE TOWNSHIP OF LAKEWOOD, IN THE COUNTY OF OCEAN, AND ARMORY PARMENTIER, TAX COLLECTOR OF THE TOWNSHIP, DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued January 13, 1969
    Decided January 24, 1969.
    Before Judges Sullivan, Foley and Lewis.

      Mr. Harry JDvorhen argued the cause for appellant.

      Mr. James P. JecJc argued the cause for respondents.
   Per Curiam.

This is an in lieu action to determine the validity of tax sale certificates issued to defendant township. Following the close of the pleadings both plaintiff and defendants moved for summary judgment. The trial court denied plaintiff’s motion and granted that of defendants. Plaintiff appeals.

The issue is narrow and involves the interpretation of N. J. S. A. 54:5-30.1, which provides:

“Whenever the governing body of a municipality shall by resolution determine that a particular parcel or parcels of real estate, scheduled to be sold at public auction pursuant to the tax sale law, would be useful for a public purpose, it may authorize and direct a municipal official to attend the auction and bid for such parcel or parcels at such sale on behalf of the municipality in the same manner as any other bidder.”

Pursuant to this statute the township governing body on December 7, 1967 enacted a resolution which authorized and directed the township counsel to attend a forthcoming tax sale of property in the township and bid for certain tracts and parcels on behalf of the municipality. The resolution contained a declaration that the particular tracts and parcels involved in the tax sale would be useful for the public purpose or purposes. The sale was held on January 5, 1968. Plaintiff and defendant were the only bidders. Plaintiff bid an 8% interest rate for 272 of the 1182 parcels enumerated in the resolution and tendered $4,276 in full payment of the face amount of the liens. The township then bid a 7% interest rate. Over the protest of plaintiff that the township bid was illegal, defendant tax collector accepted that bid and struck off the tax sale certificates to the township.

Plaintiff then brought the in lieu action to have the township resolution and the rejection of plaintiff’s bid held illegal, to require the tax collector to accept plaintiff’s bid and issue tax sale certificates in accordance with it, and to direct the township to cancel any tax sale certificates it had received.

Plaintiff’s major contention at trial level and on this appeal is that the township resolution was contrary to law because the governing body failed to determine the specific public purpose for which the subject premises were to be used.

In effect, the trial court held that the purpose of the statute was to enable the municipality to compete on equal footing with other bidders at a tax sale, a right which it did not have prior to the enactment of N. J. S. A. 54:5-30.1, and further that where, as here, a governing body acting in good faith determines that the land involved would be useful for a public purpose the statute does not require it to determine a particular public purpose for each parcel upon which the municipality is to bid.

We think that in the circumstances of this case, where -the good faith of the governing body is not challenged, no palpably genuine issue of fact relating to the township’s right to bid competitively was presented, and that the trial court properly entered summary judgment in its favor. Specifically, we hold that the recital in the resolution that the property “would be useful for the public purpose or purposes” was in the circumstances a sufficient basis for the township’s participation in the auction. The remaining points are without merit.

Affirmed.