text:
    TEXAS EASTERN TRANSMISSION CORPORATION, PETITIONER-APPELLANT, v. BOROUGH OF CARTERET, TOWNSHIP OF EDISON, TOWNSHIP OF PISCATAWAY, TOWNSHIP OF WOODBRIDGE, DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued September 22, 1970
    Decided October 15, 1970.

      Before Judges Kilkenny, Halperk and Lake.

      Mr. Robert J. Del Tufo argued the cause for appellant (Messrs. Jeffers and Dillon, attorneys).

      Mr. Sam Weiss argued the cause for respondents.

      Mr. John M. Kolibas argued the cause for respondent Borough of Carteret.

      Mr. Roland A. Winter argued the cause for respondent Township of Edison.

      Mr. Joseph Stevens, attorney for respondent Township of Piscataway.

      Mr. Isadore Rosenblum argued the cause for respondent Township of Woodbridge.

      Mr. Herbert K. GlicTcman, Deputy Attorney General, filed a statement in lieu of brief (Mr. George F. Kugler, Jr., Attorney General of New Jersey, attorney for Division of Tax Appeals).
   The opinion of the court was delivered by

Kilkenny, P. J. A. D.

Petitioner appeals from final judgments of the State Division of Tax Appeals, affirming deter-ruinations of the Middlesex County Board of Taxation, upholding the 1967 assessed valuations fixed for local taxation by the municipal authorities of the Townships of Edison, Piscataway, Woodbridge and Borough of Carteret.

The property consists of pipelines of varying dimensions owned by Texas Eastern, to the extent of their footage in the respective municipalities. Some of these were used in combination with continuances thereof for the transmission of natural gas from Texas to the Mew York metropolitan area. Other pipelines of Texas Eastern in these New Jersey municipalities were “idle,” not being in active use.

Uo useful purpose would be served by a recital of the footage and dimensions of each particular kind of pipeline in each municipality; or when the pipelines were built; or the respective municipal assessed valuations. A common formula, known as the “Middlesex County Formula,” because it had been approved and recommended for common use by the Middlesex County Assessors Association, had been employed by the respective local assessors in calculating values. The propriety and the correctness in the application of that formula are the main issues on this appeal.

Two local assessors, one from South Plainfield and the other from South Brunswick, testified as to the “Middlesex County Formula.” All the lines were appraised at their “historical cost,” meaning the cost when the lines were built. The “per foot cost” was determined by dividing the cost of the “spread” of the pipeline in blew Jersey by the footage in the particular spread. There was deducted from cost 15% as a single, non-recurring depreciation factor. This was done to stabilize the annual valuations and thus avoid the need to recalculate true value from year to year. By way of exception, a 20% deduction in the historical cost was made in the case of the 20-ineh pipeline.

Applying this formula to the various lines, the 36-inch line’s cost was fixed by the local assessors at $46 a foot and, with a 15% depreciation, true value per foot was determined to be $39.10. The 24-ineh pipeline’s cost was set at $27 a foot and depreciated 15% to make it $22.95. The 20-inch line was valued at $16 a foot and applying the 20% depreciation factor was reduced to $12.80. The 12-inch line was valued at $10 a foot and then reduced 15% to $8.50. The 10-inch line, valued at $8 a foot, by similar deduction of 15%, became $6.80. The 8-inch line, valued at $6 a foot, was reduced by 15% to $5.10.

The idle 12-inch line was valued at $4.20 a foot since it was idle. The idle 10-inch line was valued at $3.40 a foot and the idle 8-inch line at $2.55. This represented 50% of the value of the active lines. The reason why these idle lines have not been in service is that the so-called “Big and Little Inch” pipelines were built for the transmission of oil from the Texas fields to New Jersey refineries during World War II, but thereafter they ceased to be useful for the transmission of oil to customers, because Texas Eastern does not have customers for oil. The company uses its pipelines for the transmission of natural gas to different customers. It admittedly owns the “idle” lines.

By multiplying the per foot valuation of each kind of pipeline, determined as above, by the footage of each kind of pipeline in a particular municipality, the respective local assessors calculated the “true value” of the pipelines for local tax purposes.

All municipalities in Middlesex County are supposed to assess at a ratio of 50% of true value, according to a County Board directive. Belying upon that directive, each of the respondent municipalities fixed the “assessed value” of Texas Eastern’s pipelines at 50% of “true value,” as calculated above. Texas Eastern had been so billed and had paid the taxes so determined.

Following a hearing before Judge Gotshalk in the State Division on June 2, 1969, the judge determined:

There was not before me evidence of the cost of these lines from which X could make a positive finding of value * * *. (Emphasis added).

By reason thereof, the judge felt “compelled to affirm the finding of the County Board as to true value * * Ac-

cordingly, Texas Eastern’s appeals were dismissed and the County Board’s valuations were affirmed by judgments of the State Division entered on December 5, 1969.

I

“The settled rule is that there is a presumption that an assessment made by the proper authority is correct and the burden of proof is on the taxpayer to show otherwise. * * * the presumption stands until sufficient competent evidence is adduced to prove a true valuation different from the ■ assessment. Such evidence must be definite, positive and certain in quality and quantity to overcome the presumption.” Aetna Life Insurance Co. v. City of Newark, 10 N. J. 99, 105 (1952).

On appeal to the county board, “there exists a presumption in favor of the quantum of the tax assessment made by the local taxing authority and the burden is on the taxpayer to prove otherwise. * * * It has also been held that a similar presumption attaches to the judgment of the county board on the appeal to the Division of Tax Appeals.” Riverview Gardens Section One v. North Arlington Borough, 9 N. J. 167, 174-175 (1952).

As noted above, the taxpayer’s appeals to the Division from the judgments of the County Board were dismissed on the ground that there was no evidence before the Division of the “cost” of these lines from which a finding of value could be made. On the contrary, the “historical cost” of the pipelines constituted part of the very formula applied by the local assessors in calculating “true value.” We have set forth above the per foot cost of each kind of pipe, as used by the local assessors in deciding first “true value” and thereafter diminishing it by the 50% county ratio to arrive at “assessed value.” The testimony of witnesses, Prothro, Linger and Renk, produced by Texas Eastern, and the inventories and tax bills introduced as petitioner’s Exhibits P-2, P-3, P-4 and P-5 established without contradiction both the details of the “Middlesex County Formula” and their use in computing the contested assessments. Judge Gotshalk also made specific factual findings as to the “cost” figures in the early part of his opinion, as set forth herein supra.

Presuming the correctness of these “cost” figures used by the local assessors in their computations and the correctness of the footage of each kind of pipe in their respective municipalities, wo find that the depreciation percentage, rather than “cost,” presented the real basic issue. The local assessors reduced the “cost” figures by 15% as to all pipelines, except the 20-inch lines, and depreciated the cost of those lines by 20% to arrive at “true value.” This was in accordance with the “Middlesex County Formula,” recommended by the unofficial Middlesex County Assessors Association.

On the contrary, as shown by the evidence, the New Jersey Assessors Association, also an unofficial body, had recommended on a state-wide basis a standard depreciation deduction from historical cost of 4-5%, continuing the resultant value from year to year. So, too, there was proof that the Federal Power Commission, which exercises control over these interstate natural gas transmission companies, had limited to 3% the annual depreciation deduction, as opposed to the constant 15% or 45% recommended by the County and State associations, respectively.

Moreover, in an analogous set of appeals by Transcontinental Gas Pipe Line Corporation, involving similar pipelines in these same respondent municipalities and others in New Jersey, heard by Judge Gotshalk in the State Division on March 3, 19C9, prior to the Division’s hearing the instant appeals, the Federal Power Commission’s 3% depreciation was used as a factor, inter alia, in determining those appeals. As noted above, the Transcontinental judgments were entered in the Division on August 28, 1969, more than three months before entry of the December 5, 1969 judgments in this Texas Eastern case.

We heard contemporaneously the municipalities’ appeals in the Transcontinental case and the pipeline company’s cross-appeal (Docket Wo. A-190-69) and the instant appeal by Texas Eastern. We feel that the same standards ought to be applied to both taxpayers by these same municipalities, common issues being involved.

The pipeline company taxpayer and the municipalities agree, as does the State Division, that the ordinary rule for determining true value for purposes of taxation is not applicable here. Judge Gotshalk recognized this when he said in his opinion, in referring to the great difficulties in assessing the value of pipelines, “our willing buyer and willing seller theory cannot be applied to a pipeline in Wew Jersey or in any particular municipality.” He advocated that pipelines should be subject to State taxation, not local assessment, with money returned to the municipalities “in the same method as other utility taxes, such as Second Class Railroads are.”

We agree that the ordinary theory of value, “what a willing buyer would pay a willing seller,” is not applicable to mere segments of a pipeline which extends from Texas to Wew York. The application of an “historical cost” minus “depreciation” to arrive at “true value” is a reasonable approach. The parties seemingly agree. “Historical cost” is used because these utility companies, under regulation by the Eederal Power Commission, are required to set up in their books the original investment cost as the basis for the limited percentage income thereon to which they are subjected. They may not increase that figure on their books, even though economic conditions may have brought about an increase in the value of things. At the same time, these utility companies are limited by federal regulations to an annual depreciation of 3% in the historical cost figure.

The State Division applied that 3% depreciation factor against historical cost in the Transcontinental appeal. To that extent, we are in accord and would apply that formula basically to the facts herein. We would, however, as hereinafter noted, limit the period of depreciation.

II

We find, too, that assessing the “idle” lines at 50% of the value of the lines in use is not unreasonable. The taxpayer urges that the assessment should be only nominal. We do not agree. The mere inutility of property does not justify making it tax-exempt, or almost so. A non-user of land or of structures and improvements thereon does not reduce the taxable value of the land or of the structures or improvements. An unoccupied home is none the less taxable. Taxpayers are wont to demolish structures on land to remove them from the tax rolls. Here, the pipeline company still has a potential use of the oil pipelines now idle. Lack of functional use has been recognized by the local assessors by the 50% deduction in value. We are not persuaded that a reduction to nominal value of the idle lines is required.

III

We do not subscribe to the State Division’s use of a 25% “appreciation” in the cost, because of rising economic conditions, as was done in the Transcontinental case. These utility companies are limited by federal regulations to a fixed rate of income (6.50%) and that rate is based on “historic cost.” So, too, the depreciation is limited by the E. P. C. to 3% of the same historic cost and is not based on any “appreciation” in the cost resulting from rising values. So restricted, it would be inconsistent and unfair to add a 25% appreciation factor in deciding true value for tax assessment purposes.

IV

The 15% depreciation constant deduction from cost, recommended by the Middlesex County Assessors Assoeiation, and the 45% deduction recommended by the State Association, are not devoid of all merit. They would produce a single value, usable from year to year, without the need for annual change to take care of ever-increasing depreciation and obsolescence. Obviously, developing technical improvements in the quality, size and functioning of these pipelines will render the present pipelines obsolete. They will probably be replaced by newer and better pipes, longer lasting, less subject to corrosion and the like.

The 3% depreciation fixed by federal regulation for the existing pipelines is seemingly based on an approximate 30-year functional life-span. Apportioning depreciation over an entire life-span at the inception of the period, for once and for all, would require a depreciation of approximately 40 to 50%, as testified to by the taxpayer’s witness, Broley E. Travis, a consulting valuation engineer since 1962. This simply means that you apply the depreciation percentage at the approximate median point of the functional life and apply it from beginning to end. The net result balances the over-percentage for half of the years against the under-percentage for the other half of the years. It would produce a common percentage throughout the life-span, as contrasted with the ever-increasing percentage, where a figure of 3% for the first year becomes higher with each passing year. We find the Division’s use of the 3% annual and ever-increasing annual percentage of depreciation, authorized by the Eederal Power Commission, a common method employed in business, reasonable, consistent with everyday realities and valid.

Y

We next consider the taxpayer’s claim of discrimination. Judge Gotshalk found that Piscataway and Carteret, for the year 1967, were adhering to the 50% county ratio. As to Edison, its ratio was 41% and he applied it in the Transcontinental case. As to Woodbridge, the judge found a 37% ratio should be applied. Ye.t, he doubted his need of application of those ratios herein only because “there was no finding by me of value.”

Yet, the “values” fixed by the local assessors and approved by the County Board were adopted by the State Division. Without applying the true ratios of 41% and 37% applied respectively by Edison and Woodbridge to other properties in their townships, discrimination was effected against Texas Eastern. This is especially obvious when we consider that the State Division applied those lower ratios to the true values of Transcontinental’s pipelines, while upholding the higher 50% of true value as to Texas Eastern’s pipelines.

The municipalities argue that the taxpayer did not adequately prove the common level or average ratio. The judge’s finding of the reduced ratios in the Transcontinental case should be equally applied to Texas Eastern. Fairness mandates that the ratio applied to Texas Eastern should not be higher than that applied to the other taxpayers of these two municipalities.

VI

One difficulty with the 3% depreciation method lies in the potentiality that, unless checked at some point, the cost figure minus the ever-increasing depreciation figure can become zero. In Transcontinental, depreciation at 3% over a IG-year period has reached 48%. It would be unrealistic to continue this item unlimitedly to a point where theoretically the pipelines would have no value and would, in effect, be tax exempt.

Our concern is with the 1967 valuations. The issue of allowing further depreciation beyond the 48% figure has not been determined or briefed on this appeal. Accordingly, we make no determination as to the point when further depreciation should stop. As suggested by the State Division, the valuation of these pipelines should be considered by the Legislature and a suitable state-wide formula enacted for universal guidance throughout the State. We are in accord with this suggestion.

CONCLUSION

The State Division’s affirmance of the County Board’s judgments is reversed. The local assessments for the purpose of taxing Texas Eastern pipelines will be calculated by taking the historical cost of each bind of pipeline, as per the figures noted above; then deducting 3% per annum cumulatively but not exceeding 48% pending clarifying legislation or a more suitable record than that before us, and after that, applying the particular municipal ratio used in assessing other properties in the municipality. “Idle” pipelines will be assessed at 50% of active pipelines. The 25% “appreciation” factor will not be added.

The matter is remanded to the State Division for a recalculation of the 1967 assessed valuations consistent with this opinion.


source: Caselaw Access Project

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

license: Public Domain

text:
    FRANCIS X. HAYES, PLAINTIFF-APPELLANT, v. HUDSON COUNTY BOARD OF CHOSEN FREEHOLDERS AND CLERK OF HUDSON COUNTY, DEFENDANTS-RESPONDENTS, AND CHESTER J. WOJTYCHA, INTERVENOR.
    Superior Court of New Jersey Appellate Division
    Argued August 9, 1971
    Decided August 9, 1971
    Opinion Filed August 17, 1971.

      Before Judges Cohfokd, Leo hard and Matthews.

      Mr. Francis X. Hayes, appellant, argued the cause pro sc.

      Mr. Daniel F. Gilmore, Assistant County Counsel, argued the cause for respondents Hudson County Board of Chosen Freeholders and Clerk of Hudson County (Mr. William F. Kelly, Jr., Hudson County Counsel, attorney).

      Mr. John J. Mulvihill argued the cause for respondent Chester J. Wojtycha (Messrs. Crummy, O’Neill, Del Deo & Dolan, attorneys; Mr. John T. Dolan, of counsel).
   The opinion of the court was delivered by

Conford, P. J. A. D.

The questions before us are: (a) whether there is a vacancy in the Board of Chosen Freeholders of Hudson County resulting from the conviction, on April 22, 1971, of Chester J. Wojtycha, an elected member of that body, for violation of N. J. S. A. 2A:135-8(c) (being personally interested in sale of goods to the county); (b) if there is such a vacancy should it be filled in accordance with whatever law governs the filling of vacancies on such a body notwithstanding the fact that Wojtycha has filed an appeal from the conviction which is pending in this court, and (c) is there such a law?

The trial court held that no vacancy existed because N. J. S. A. 2AH35-9, although declaring a forfeiture of office on such conviction, provides for restoration of the office in the event of reversal of the conviction.

"Wojtycha tvas elected to the board of freeholders on November 3, 1969 for a term of three years to expire January 1, 1973. He filed his appeal from the conviction referred to on June 29, 1971. It is pending, undetermined, in this court.

N. J. S. A. 2AH35-9 reads:

Any person holding an office or position, elective or appointive, under the government oí this state or of any agency or political subdivision thereof, who is convicted upon, or pleads guilty, non vult or nolo contendere to, an indictment, accusation or complaint charging him with the commission of a misdemeanor or high misdemeanor touching the administration of his office or position, or which involves moral turpitude, shall forfeit his office or position and cease to hold it from the date of his conviction or entry of plea.
If the conviction of such officer be reversed, he shall be restored to his office or position with all the rights and emoluments thereof from the date of the forfeiture.

All parties herein agree that a violation of N. J. 8. A. 2A:135-8(c), which constitutes a misdemeanor, is an offense “touching the administration of his office” by the person convicted thereof, for purposes of N. J. 8. A. 2A :135-9.

Also material to the disposition of this appeal are the provisions of N. J. 8. A. 40:20-4 (applicable to first class counties, of which Hudson is one). That section reads:

Vacancies in the board of chosen freeholders caused by death, resignation or inability to serve in office shall be filled by the remaining members of the board until the annual stated meeting of the board next after the vacancy occurs, and at the first general election held after the vacancy occurs a person shall be elected to fill the office for the unexpired term only.

Plaintiff, a citizen-taxpayer of Hudson County, argues that N. J. 8. A. 2A:135-9 should be applied literally; that it expressly declares a forfeiture of office as of the date of the conviction, and that a forfeiture to the incumbent necessarily works a vacancy in the office forthwith which, in the ordinary course and consonant with sound public policy, should be filled by the processes of law. He further contends that the foregoing conclusions are not negated by the provision in the statute for restoration of the office to the person convicted in the event of reversal of the conviction; that this merely entails a termination of the incumbency of the successor in the stated event, in the absence of which he holds for such term as is prescribed by the applicable statute.

The trial court and defendants basically take the position that the contingency of restoration makes it unreasonable to infer a legislative intent for an ad interim vacancy in the office and that a species of suspension of the office pending the outcome of all appeals is more likely what the Legislature intended. The court anticipated the likelihood of “chaos” and “an intolerable situation, not in the public interest” should a successor be appointed or elected and thereafter a reversal of the conviction take place.

There is no reported precedent in this State for resolution of the dispute. Nor is there any out-of-state decision in point. There are many cases in other jurisdictions holding that the effect of a constitutional or statutory provision vacating or forfeiting a public office upon a criminal conviction of the incumbent is not abated or stayed pending the event of an instituted appeal from the conviction. See Annotation, 71 A. L. B. 2d 593, 599-602 (1960). But none of these cases involved a statute restoring the office to the incumbent in the event of reversal of the conviction. State ex rel. Guthrie v. Chapman, 187 Wash. 327, 60 P. 2d 245 (Sup. Ct. 1936), held the reversal of the conviction would not work a restoration to office as a matter of common law. In Becker v. Green County, 176 Wis. 120, 184 N. W. 715 (Sup. Ct. 1922), the court held a restorative statute enacted between conviction and reversal to be only prospective and not to authorize recovery of the interim emoluments of the office.

While a few cases have held the institution of an appeal effective to abate the effect of a forfeiture statute, these, for the most part, are distinguishable by virtue of special statutory language thought by the courts to mandate such results, See Annotation, 71 A. L. B. 2d, supra, at 603—605.

Although, as indicated, the cases representative of the majority rule on the ineffectiveness of an appeal to stay the operative effect of a conviction as creating an instant vacancy, are distinguishable from the ease before us, their rationale is not entirely without present significance.

As stated in People ex rel. Keenan v. McGuane, 13 Ill. 2d 520, 150 N. E. 2d 168, 177 (Sup. Ct. 1958):

These decisions are generally predicated upon the theory that after a plea or verdict of guilty, judgment, and sentence by a court of competent jurisdiction, the presumption of innocence which, up to that time, had persisted in favor of the defendant, no longer prevails, and that the law thereafter presumes that the proceedings have been regular and that the defendant is guilty.

The court further declared (150 N. E. 2d, at 177-178) :

Respect for the law and confidence in public officers cannot be compelled. These attributes stand as a voluntary tribute to just laws and integrity in public office. While they exist, both the law and the official will retain public trust. Confidence in an elective official is destroyed when he is convicted of an infamous crime. ® * * While neither the constitution nor the statutes effecting its purpose define the term “conviction,” yet respect for the law and deference to the transcendent trust placed in public officials requires that such officer forfeit his office after the presumption of his innocence is disspelled by conviction of an infamous crime in a trial court.

It seems to us that the foregoing expressions are fully applicable in this State and that the approach therein explains the use by the Legislature of the term “forfeit” and the designation of the date of conviction as the effective date of such forfeiture of office in the statute before us for construction. Our cases aptly treat the concepts of forfeiture of office and consequential vacancy therein as correlative. See Kobylarz v. Mercer, 130 N. J. L. 44, 46, 47 (E. & A. 1946). “An office is vacant whenever it is unoccupied by one who has the legal right to hold it and exercise the powers and perform the duties pertaining thereto.” Paull v. Pierce, 68 N. J. Super. 521, 528 (Law Div. 1961), and eases cited. The latter portion of the quoted excerpt appropriately describes the status of Wojtycha under the statute immediately upon the conviction and since then to the present time.

If, as we believe to be the case (see infra), the vacancy in the office is one which ordinarily would be subject to filling by appointment by the board of freeholders of a successor until January 1, 1972 and the election of a new freeholder in November 1971 for the remainder of Wojtycha’s term, the statutory provision for restoration of the office to Wojtycha in the event of reversal should not militate against the hypothesized course in this case. It is eminently in the public interest that there be no extended vacuum in a public office. The people of Hudson County are entitled to administration of county government at all times by nine freeholders. If, in the present ease, four or five of the freeholders had been convicted rather than one, application of the rule pronounced in the Law Division would have crippled county government until final exhaustion of all available appellate remedies in all courts possessing jurisdiction to reverse. In principle, the same rule of statutory construction must apply whether the vacancies involved are one or several. Exhaustion of all appellate remedies, state and federal, can potentially take years in a given case, and the legislative intent must be appraised against the context of the hard case, not the easy one.

Application of the literal terms of N. J. S. A. 2A :13o-9, in pari materia with those of N. J. S. A. 40 :20-4, would not create any “intolerable situation” such as feared by the trial judge. The board of freeholders would appoint a person to serve until January 1, 1972 (the next annual stated meeting of the board), and the people would elect a successor to serve from January 1, 1972 until the expiration of Wojtycha’s term. If prior thereto the conviction were reversed, the incumbency of either successor would automatically terminate and Wojtyeha’s title to the office would revest. If the latter postulate be argued to cut down the term of the successor as fixed by N. J. 8. A. 40:20-4, the answer is simply that the process of reading the two enactments together and searching for a congruent result yields the stated conclusion. Assured thereby are both public policy objectives — keeping a public office filled and doing justice to an unjustly convicted official.

We have finally to consider whether the case of the convicted freeholder comes within the scope of ifvacane[y] caused by * * * inability to serve in office,” for purposes of IV. J. 8. A. 40:20-4. The provision is literally applicable if the language is understood in a colloquial sense. One whose office is forfeited is obviously unable to serve. That the primary intent of the Legislature in the use of the stated language may have been the case of physical or mental incapacity to serve should not derogate from the appropriateness of judicial elasticity in construing the phrase where the employment of the statute in such a case as this is so obviously in the public interest and no other statute cited to • the court provides for any mechanism of replacement of a freeholder whose office has become vacated by forfeiture; cf. N. J. 8. A. 19:3-25 (even where reversal of the conviction never eventuates). We thus conclude that the procedures specified by IV. J. 8. A. 40:20-4 are to be followed in the present instance. We hold, moreover, that in the event of a reversal of the Wojtycha conviction prior to the end of his original term he will automatically be revested in the office, the term of any interim successor, appointive or elective, coming to an end at the same time.

Reversed and remanded for entry forthwith of a judgment conformable with the directions in this opinion. No costs.

      (?/. Kf. J. S. A. 19 :3-29 which provides that “a vacancy happening” in public offices other than the state or national legislatures shall be filled at the general election next succeeding the vacancy unless the vacancy occurs within 37 days prior to the election in which event it is to be filled at the second general election next succeeding. But since such a vacancy is qualified by the limitations of N. J. S. A. 19 :3-25, none of which apply here, N. J. S. A. 19 :3-29 is not relevant in the present case.

      We think the conclusion arrived at is not affected by the contingency that the public might have to pay for the services of two officials for the interim period between designation of the first successor and the reversal. But the intimation in De Marco v. Bd. of Chosen Freeholders of Bergen County, 21 N. J. 136, 146 (1956), is that interim pay would not have to be accorded the convicted official.


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

text:
    LOIS SCOTT AND WILLIAM SCOTT, PLAINTIFFS-APPELLANTS, v. SALEM COUNTY MEMORIAL HOSPITAL, DEFENDANT, AND JEROME COTLER, M. D., AND BASIL INGEMI, M. D., DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued May 4, 1971
    Decided June 3, 1971.

      Before Judges Lewis, Matthews and Miettz.

      Mr. Marvin D. Perskie argued the cause for appellants (Messrs. Perskie & Perskie> attorneys).

      Mr. Carl Greenberg argued the cause for respondents (Messrs. Porzio, Bromberg & Newman> attorneys).
   The opinion of the court was delivered by

Lewis, P. J. A. D.

Plaintiffs Lois Scott (herein plaintiff) and William Scott, her husband, appeal from an adverse judgment of the Law Division entered upon a jury verdict of no cause for action in favor of defendants, Medical Doctors Jerome Cotier and Basil Ingemi, from the denial of their motions for a new trial and from the denial of their application to take additional testimony from defendant Cotier and the wife and the sister-in-law of the jury foreman, James Beck, in connection with a charge of improper communications with the jury. The Salem County Memorial Hospital (hospital) was also a party defendant, and in a bifurcated trial on the issue of liability, the jury returned a verdict against it in favor of plaintiffs. The hospital did not appeal.

We recite only the essential facts that appear in the record. About 6 p.m. on July 16, 1966, plaintiff, a 42-year-old woman, was accidentally knocked down by a boy carrying a football. She was immediately taken to the hospital where she was examined by Dr. Cotier, the Chief of Orthopedies of the Medical Staff. He recalled that plaintiff related that there was an “audible snap” and that she experienced “painful deformity of the right lower leg, inability to aright or ambulate.” lie diagnosed her condition as a “closed com-minuted fracture right tibia and fibula” with marked displacement. The doctor treated her fractures by a closed reduction and applied a “snug, long leg” plaster cast extending from plaintiff’s groin to the toes of her right foot.

On the following day, Sunday, July 17, plaintiff complained to her husband, her roommate and the hospital nurses that the cast was tight and uncomfortable and that she wanted relief. By 3 p.m. she could not move her toes. Although two “house physicians” (neither of whom was licensed as a medical doctor by the State of New Jersey) viewed her leg and conferred about it, they did nothing to relieve her. That night, plaintiff’s husband spoke to the desk nurse and was informed that neither Dr. Cotier nor his partner, Dr. Ingemi, was immediately available.

Prior to leaving plaintiff on Saturday, July 16, Dr. Cotier left instructions on the hospital chart that he was to be notified if any problems developed. The doctor was on call Sunday, but neither he nor Dr. Ingemi visited plaintiff that day. On Monday, July 18, Dr. Cotier left on a vacation and, by pre-arrangement, his partner, Dr. Ingemi, assumed the care of all their patients, including plaintiff, whose medical status he had previously discussed with Dr. Cotier.

On Monday morning, Dr. Ingemi received a telephone call from a hospital nurse concerning plaintiff’s condition, which had so deteriorated that there was no motion or sensation in her toes. The doctor ordered the cast to be split to the mid-tibia and the immediate administration of medication. Later that day, Dr. Ingemi personally attended plaintiff; the cast was then split to the knee and further medication was administered.

Subsequently, following a consultation with Dr. John Reinhardt, the Chief of Surgery of the hospital, plaintiff’s right leg, which had developed gangrene, was amputated below the knee.

At the trial, plaintiffs’ experts, Doctors Raymond Tronzo and Robert Tuby, testified that the critical day in the treatment of plaintiff was Sunday, July 17, and that the loss of plaintiff’s leg was attributable to the defendants’ failure to timely bivalve the cast to release the pressure created by edema and the failure to remove the cast or its top portion promptly upon the initial manifestation of circulatory embarrassment. Dr. Tronzo opined that the most propitious time for relieving plaintiff was on Sunday. He and Dr. Tuby agreed that plaintiff’s condition was irreversible after the expiration of a 12 to 16-hour period without blood circulation and that defendants were negligent in failing to examine their patient on Sunday and Monday morning.

Defendants disputed this ascription of negligence. However, when Dr. Ingemi was questioned as to why he did not ask another doctor to look at plaintiff’s foot in order to determine whether his telephonic direction of Monday morning to bivalve the east to the mid-tibia was sufficient, he replied, “it was my responsibility.” It is also noteworthy that defendants conceded that a tight cast could have caused gangrene. Nevertheless, they took the position that plaintiff’s problem was occasioned by an injury to the nerves or vascular system at the time of her accident. Significantly, however, Dr. Cotier’s initial examination of plaintiff revealed no evidence of such injury.

Plaintiffs predicate their appeal on the following grounds: (1) the trial court failed to deliver a charge to the jury, as requested, on the law of concurrent negligence; (2) the verdicts were inconsistent and against the weight of the evidence; (3) there were improper, irregular, direct and indirect communications to and within the jury, and the refusal of the trial judge to allow a more extensive inquiry with regard to these communications constituted prejudicial and reversible error; (4) the trial court erred in ordering a bifurcated trial; (5) there was an abuse of judicial discretion in not allowing counsel to conduct voir dire and in deleting proposed questions to prospective jurors; (6) substantial prejudice resulted from the manner in which the jury was selected, and (7) the trial judge erred in disallowing rebuttal evidence respecting expert testimony.

We are satisfied that justice mandates a retrial of this case. In the circumstances, the instructions to the jury should have included, as requested, a charge with respect to concurrent negligence. The mere statement by the court that all defendants might be jointly liable could have easily been understood by the jury to mean that all defendants were to be held liable if the negligence of each could have or did produce the injury by itself. “The law of negligence recognizes that there may be two or more concurrent and directly cooperative and efficient proximate causes of injury.” Menth v. Breeze Corporation, Inc., 4 N. J. 428, 442 (1950). Nevertheless, these acts need not of themselves, be capable of producing the injury; it is enough if they are “a substantial factor” in bringing it about. See Rappaport v. Nichols, 31 N. J. 188, 203 (1959), quoted with approval in Titus v. Lindberg, 49 N. J. 66, 76 (1967). Also see Robbins v. Thies, 117 N. J. L. 389, 394 (E. & A. 1937), and Peer v. Newark, 71 N. J. Super. 12, 28 (App. Div. 1961), certif. den. 36 N. J. 300 (1962).

Tne trial judge also erred in unduly restricting the cross-examination of Dr. Cotier by plaintiffs’ counsel with respect to a treatise entitled Watson-Jones on Fractures and Injuries which the doctor had indicated was a recognized, standard authority on the subject. See Ruth v. Fenchel, 21 N. J. 171, 176-79 (1956); Swank v. Halivopoulos, 108 N. J. Super. 120, 125 (App. Div. 1969), certif. den. 55 N. J. 444 (1970).

The record reveals that after the trial, Mrs. Nolan, a juror, informed the trial court, in substance, that (1) upon the jury’s commencement of deliberation, the jury foreman, James Beck, said that “[t]he judge would be very angry if we brought back a quick, you know, disposition of this case”; (2) a newspaper clipping or clippings were read and discussed in the jury room; (3) juror Newhard, who has a brother-in-law who is a doctor and two sisters who are nurses, suggested that malpractice insurance rates were rising because of “cases like this”; (4) a court attendant told the jury to “hurry up”; (5) the heat in the jury room was so oppressive that one juror fainted, and (6) Beck received a communication from his sister-in-law, who was a patient of Dr. Cotier, that the doctor advised him to be strong-willed. Parenthetically, at this juncture, we note that the respective verdicts in favor of the doctors and against the hospital were 10-to-2, and that jurors Beck and Newhard not only voted in favor of the doctors but were the two jurors who voted to relieve the hospital of liability.

Pursuant to B. 1:16~1, the trial judge interrogated the jurors individually, in camera, concerning the asserted claims. A transcript of the proceedings discloses that, to a large extent, these charges, repeated in the testimony of Mrs. Nolan, were not fully substantiated by the remaining jurors. While Mrs. Nolan demonstrated disappointment in the verdict and was “inflamed,” there were certain aspects of her testimony that had a ring of truth and were persuasively corroborated.

There is no doubt that a newspaper article with respect to the death of the brother of plaintiffs’ counsel had been circulated among the jurors; in the circumstances of this ease, we deem this irregularity of no consequence. Also, it is clear that there was a discussion in the jury room concerning the high cost of malpractice insurance, as is pointedly revealed in the testimony of juror Hall, which in pertinent part, reads:

Q. Did you hear Mr. Newhard make any remarks concerning the fact that his brother-in-law was a doctor and his insurance rates were high because of things like this?
A. That I did.
Q. You did hear him say that?
A. Yes. * * *
A. His brother-in-law was a doctor in New York or Connecticut or somewhere.
Q. Yes.
A. And that he knew or he assumed that insurance was high.
Q. Because of cases like this?
A. Presumably, uh huh.
Q. You say “presumably.” Did you say that he said “presumably” or are you presuming this? In other words, did he say that his brother-in-law was a doctor and that his malpractice insurance rates were high because of cases like this?
A. That’s correct.
Q. This is what he said?
A. That’s correct, as I remember.

The evidence is conflicting as to just when and what was said to the jurors by the court attendant to the effect that they should “hurry up.” Juror Myers, in answer to the court’s question, “Did any attendant, specifically a lady attendant, at any time say to hurry up- with your deliberations?”, said, “Yes, uh huh, to be truthful with you, yes,” and then qualified his answer with the statement, “Come on, it’s getting late,’ I believe that’s what she said * * * or something like that.” Mrs. Palilonis, another juror, expressed it this way: “She [the court attendant] didn’t say ‘Hurry up,’ Judge Smith, but we got the impression that she was irritated, you know, because we seemed to be taking too long. This was the impression that I got.” Mrs. Palilonis added, “I didn’t let that influence me and I don’t think anybody else did.”

It was Mrs. Palilonis who allegedly fainted, and, as to that happenstance, she explained, “I felt faint and I felt sick. I think it was the cigar smoke and not too much ventilation. * * * I felt sick but I wouldn’t let that influence my thinking.”

Of greater significance is the indication that Dr. Cotier did, indirectly during the trial, attempt to convey a message to Beck, the foreman of the jury. Toward the end of the trial, Beck’s wife was hospitalized for three days and he visited her at the hospital. During his interrogation, Beck gave the following testimony:

Q. Did you tell Mrs. Nolan that you had a message?
A. I believe I told her that my sister-in-law had said that Dr. Cotier asked her if — if her husband had a brother. I never met Dr. Cotier. I believe this was what I — what you’re indicating.
Q. Your sister-in-law?
A. Who still, evidently, has had contact with Dr. Cotier.
Q. You spoke with her during the trial?
A. I believe she called my wife on the telephone.
Q. Well, what was said to you?
A. My wife said that my sister-in-law had asked if I was her husband’s brother. Dr. Cotier had indicated that there was a Beck on the jury and —
Q. Did you have a conversation with Mrs. Nolan one noontime in the jury room and say that you had received a message and did she say “X don’t want to hear about it?”
A. No, I don’t believe so.
ME. PERSKIE: Can we find out when during tlie trial this conversation took place with Cotier and his sister-in-law?
THE COURT: Well, was it during the trial? It must have been.
MR. BECK: It was, I would believe, during about the middle portion of the trial. Somewheres close to the middle portion. After the story had been in the paper, after it was common knowledge.
THE COURT: Hid your wife give you any message from Dr. Cotier through your sister-in-law?
MR. BECK: No, sir.

Following the in camera proceedings, plaintiffs’ counsel requested the opportunity to interrogate the foreman’s wife, his sister-in-law and Dr. Cotier; the request was denied. The trial judge determined that “there was no misconduct on the part of any juror during the deliberation” and denied plaintiffs’ motion for a new trial.

In light of the evidence to which we have alluded and its potential for prejudice, we are convinced that the trial court should have allowed further inquiry with respect to the alleged irregularities. See State v. Boiardo, 111 N. J. Super. 219, 235 (App. Div.), certif. den. 57 N. J. 130, cert. den. 401 U. S. 948, 91 S. Ct. 931, 28 L. Ed. 2d 231 (1970); State v. Sachs, 69 N. J. Super. 566, 588 (App. Div. 1961).

Having reached the conclusion that the matter should be retried, it is not necessary, for purposes of this opinion, to discuss the remaining arguments advanced on appeal. We observe, however, that while plaintiffs’ experts testified that the defendant doctors were negligent in failing to visit or check the condition of their patient on Sunday, defendants produced no independent expert testimony with respect to their professional duty which “must be measured by some medical standard of care and treatment.” Carbone v. Warburton, 11 N. J. 418, 428 (1953). Here, defendants merely indicated “that it was their practice not to make rounds on Sunday, but rather to rely upon the nurses and house physicians, unless they were dealing with an unusual problem or a critically ill patient.” Death knows no holiday, neither does the sudden development of a gangrenous condition following orthopedic surgery and the application of an extremital cast; the post-operative responsibility of the profession on a Sunday is no less than that on any other day during the week.

Finally, there is much in the record to suggest that the trial court might well reconsider a motion for a change of venue if plaintiffs renew such a motion.

The judgment of no cause for action is reversed and the matter is remanded for a retrial as to the individual defendants.


author: Wick, J. S. C.

text:
    CAROLINA CASUALTY INSURANCE COMPANY, PLAINTIFF, v. BELFORD TRUCKING COMPANY, INC., A CORPORATION AND JAMES T. NEIGHBORS AND JAMES G. MITCHELL, DEFENDANTS.
    Superior Court of New Jersey Chancery Division
    Decided July 29, 1971.

      Mr. Burchard V. Martin for plaintiff (Messrs. Taylor, Bischof, Williams & Martin, attorneys).

      Mr. Alex. P. Schuenemann, 3rd, for defendant Belford Trucking Company, Inc. (Messrs. Schuenemann and Pichnaily, attorneys).

      Mr. Neil F. Deighan, Jr. for defendants James T. Neighbors and James G. Mitchell. (Messrs. Kisselman, Deighan, Montano, King & Summers, attorneys).
   Wick, J. S. C.

Plaintiff has brought this declaratory judgment action to determine whether plaintiff or Belford Trucking Company, Inc., as insurers, must defend the owner and driver of a tractor-trailer in a negligence suit now pending in the Law Division. Belford, a foreign corporation, has moved to set aside service of process made under B. 4-:4r-4(c)(l) and for dismissal of the complaint because venue was improperly laid under B. 4:3-2; the place of business of plaintiff is not stated in the complaint- under B. 1:4-l (a), and the court does not have subject matter jurisdiction.

The question of subject matter jurisdiction of this court under the Declaratory Judgment Act in suits to determine the liability of an insurer is hardly open to dispute. Condenser Service v. American Ins. Co., 45 N. J. Super. 31 (App. Div. 1957), certif. den. 24 N. J. 547 (1957); Ohio Casualty Ins. Co. v. Flanagin, 44 N. J. 504 (1965).

B. 1:4-1 (a) provides that the first pleading by each party must state the residence of the party pleading. The court understands that plaintiff is a foreign corporation and the correct residence can be supplied in an amended complaint, which plaintiff should file forthwith. The body of the complaint, however, will not be stricken.

B. 4:4-4-(c) (1) provides that if personal service cannot be made on a foreign corporation by serving various persons described, substituted service by certified mail, return receipt requested, is permitted. Plaintiff’s attorney must show by affidavit that defendant could not be served by the usual methods of service. After the motion was brought by defendant Belford Trucking Company, Inc., that affidavit was filed with the court along with an affidavit of service by certified mail to Belford in Florida. The clear purpose of the rule is to vest our courts with personal jurisdiction over foreign corporations through extraterritorial service, subject only to the due process limitations of the United States Constitution. Those limitations have not yet been fully delineated by the United States Supreme Court “by concrete criteria readily applicable to all cases, whether in terms of the relationships and contacts of the foreign corporation to the forum state, of the connection of the cause of action involved with any of those relationships, or otherwise.” Corporate Dev. Specialists Inc. v. Warren-Teed Pharm., Inc., 102 N. J. Super. 143, 148 (App. Div. 1968), certif. den. 52 N. J. 535 (1968).

Belford does not claim that the certified mail service was insufficient. The summons and complaint were received. Belford knew of the pending action and now responds by moving to dismiss the complaint because this court does not have in personam jurisdiction. This is the major issue before the court.

“Traditionally, the acquisition of jurisdiction over a foreign corporation has involved (1) the power to subject it to the jurisdiction of the court, and (2) bringing it before the court by proper notice.” Higgins v. Am. Soc. of Clinical Pathologists, 94 N. J. Super. 243, 248 (App. Div. 1967) rev’d 51 N. J. 191 (1968), appeal after remand aff’d, 53 N. J. 547 (1969). N. J. S. A. 2A:16-56 provides: “When declaratory relief is sought, all persons having or claiming an3r interest which would be affected by the declaration shall be made parties to the proceeding.” The Declaratory Judgment Act cannot be construed so as to adjudicate the rights of parties who are not before the court or over whom the court does not have personal jurisdiction. Thus, an indispensable requisite to the exercise of jurisdiction in a declaratory judgment action is the service of process or notice upon all of those whom it is sought to bind by the judgment. Johnston v. Bd. of Adjustment, etc. Westfield, 15 N. J. Misc. 283, 190 A. 782 (Sup. Ct. 1937).

R. 4:3-2 (a) requires that venue be laid in the county where the parties are residents or where the cause of action arose, or in the county where the summons was served upon a nonresident defendant. While the Declaratory Judgment Act is silent on the question of venue, it still designates certain necessary, parties, but such designation cannot be used to gain jurisdiction where jurisdiction cannot otherwise be gained by the court. R. 4:3-2(b) provides that for purposes of this rule a corporation is a resident in the county where the office of its registered agent is located or in any county where it does business. Belford then argues that since none of the parties to this declaratory judgment action are residents of New Jersey, the State has no jurisdiction over them. Belford misinterprets the rule. The comment to paragraph (b) of that rule states that it includes an alternate place of residence for venue purposes — any county in which a corporate party is actually doing business, whereas, previously venue could only be laid in such a county only if the corporation had no registered office in this State. The rule gives criteria for designating the county within the State where the action should be brought. That rule does not control whether the State has personal jurisdiction over the parties. Under R. 4:4^-4(e)(1) that question is a constitutional issue of due process.

It would serve no useful purpose to trace the evolution' of the requirements of personal jurisdiction over nonresident corporations from the rigid rule of Pennoyer v. Neff, 95 U. S. 714, 24 L. Ed. 565 (1877), to the more flexible standards of International Shoe Co. v. Washington, 326 U. S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945) and McGee v. International Life Ins. Co., 355 U. S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957). See Knight v. San Jacinto Club, Inc., 96 N. J. Super. 81 (Law Div. 1967). The court, however, must weigh certain factors as delineated by those eases.

Bejecting the “quantum of activities” test of earlier cases, international and McGee supplied a flexible standard based on minimum contacts and notions of fair play and substantial justice. The court has downgraded the “doing business” criteria to merely one of a number of relevant factors to be considered before permitting extraterritorial jurisdiction. The court must not merely balance the quantum of activities alone but must view the situation and weigh the entirety of the circumstances. Amercoat Corp. v. Reagent Chem. and Research Inc., 108 N. J. Super. 331 (App. Div. 1970).

In McGee the court found it sufficient for purposes of due process that the California suit against a Texas insurance company which had been served in Texas was based upon a single contract of insurance issued in California. McGee then adds an “interest analysis approach” which would render the bringing of the suit in the forum state reasonable. Adopting this approach permits state courts to expand jurisdiction. The trend in defining due process is away from the court having immediate power over a defendant and toward the court in which the parties may conveniently settle the dispute. Additionally, the trend is away from emphasis on territorial limitations and toward emphasis on providing adequate notice and opportunity to be heard. Hoagland v. Springer, 74 N. J. Super. 275 (Law Div. 1962), aff'd 75 N. J. Super. 560 (App. Div. 1962), aff’d 39 N. J. 32 (1962). In fact, the United States Supreme Court seems to be inclined to permit dismissal of an action only where “maintenance of a suit away from the domicile of the defendant * * * might be vexatious or oppressive.” Williams v. Green Bay & W. R. R., 326 U. S. 549, 554, 66 S. Ct. 284, 287, 90 L. Ed. 31 (1946).

Restatement, Conflicts of Law 2d, § 49 (1971), says:

(1) A state has power to exercise judicial jurisdiction over a foreign corporation which has done, or has caused to be done, an act in the state with respect to any cause of action in tort arising from the act.
(2) A state has power to exercise judicial jurisdiction over a foreign corporation which has done, or has caused to be done, an act in the state with respect to any cause of action not in tort arising from the act unless the nature of the act and of the corporation’s relationship to the state makes the exercise of such jurisdiction unreasonable.

In Roland v. Modell’s Shoppers World, 92 N. J. Super. 1 (App. Div. 1966), defendant was not licensed to do business in the State, and had no offices, agents or property in the State. It had never advertised or solicited here except for a short period after the cause of action. The only contact was a shipment of goods into New Jersey where they were purchased. The injury occurred in Connecticut to a Connecticut resident. The court held (at 16) that neither the fact that the injury took place in another state “nor that the plaintiff is a nonresident is sufficient reason for holding that the service upon the defendants is unconstitutional.” There the jurisdiction was challenged in a fourth-party complaint for contribution against a foreign corporation. Here, a declaratory judgment action has been brought to determine who should defend in a negligence suit resulting from an accident in New Jersey.

In Amercoat the nonresident corporation sought to quash service because of lack of minimum contacts (having no offices, property, personnel or business in the State and shipping no goods here), in violation of due process and a burden on interstate commerce. The only connection to New Jersey was a bailment or rental of cars to local railroads. But the court found that defendant’s rolling stock of railroad cars carried freight in New Jersey. The factors the court considered were:

(1) Economic penetration into New Jersey.
(2) State interests in providing courts for its citizens.
(3) Nature of the transaction giving rise to the suit.
(4) Trial convenience.

The court found in personam jurisdiction in that case.

Roche v. Floral Rental Corp., 95 N. J. Super. 555 (App. Div. 1967), aff’d o.b. 51 N. J. 26 (1968), is relevant and its factual pattern unusual. Plaintiffs decedent died in an accident in New Jersey with a truck. The truck driver’s employer had leased the truck from another corporation that had purchased the truck from another corporation that, in turn, had purchased the chassis and refrigeration units from two other corporations. Plaintiff sued all these foreign corporations and attempted service. The court’s observations on interstate commerce are relevant: As the probability of a product entering interstate commerce increases so does the fairness of making the manufacturer defend in the plaintiff’s forum. Long distance truckers traveling from New York south almost inevitably must cross New Jersey. The manufacturer of the truck which must meet I. C. C. requirements must have realized this, so that where such a truck causes injury in New Jersey, service on the foreign corporation meets due process requirements. Thus, New Jersey is one of the many states which is expanding its jurisdiction over foreign corporations because it takes the “realistic and practical view that such is required by the ever increasing nationalization of commerce and its spread among the states.” Hoagland v. Springer, 74 N. J. Super. at 280.

Here plaintiff is asserting that Belford is an interstate carrier which under I. C. C. regulations as a self-insurer must defend a suit where a truck it leased was involved in an accident in New Jersey. Plaintiff cites 49 U. S. C. A. § 315 (1963), under which the L C. C. requires Belford to have insurance to pay “any final judgment recovered against such motor carrier for bodily injuries * * * resulting from the negligent operation * * * of motor vehicles under such certificate or permit * * The court, of course, is not deciding the merits of the declaratory judgment action at this time, but merely notes that the annotated cases to that statute, both state and federal, have held the interstate carrier liable, depending on the facts. Thus, the threat of foreign suits is but one of the costs of interstate carriers doing business in many states.

Although plaintiff might have selected Florida as the forum to determine its dispute. with Belford, the court does not consider it fundamentally unfair in choosing New Jersey. Besides, some insurer must defend the negligence suit here anyway. In this declaratory judgment action it is the nature and dominant purpose of the negligence suit to which it is related that should control the court’s determination of jurisdiction over the parties and their insurers. It is the policy of the law, particularly in declaratory judgment actions, to bring all the parties together and thus avoid a multiplicity of suits.

One further comment relating to venue, specified in the complaint for declaratory judgment as Camden County. The accident occurred in Gloucester County and the Law Division suit has venue there. Therefore, under B. 4:3-3 the court directs that the plaintiff apply for a separate order transferring this action to Gloucester County, which is also within the vicinage of this court.

Defendant’s motion is denied.


author: Botter, J. S. C.

text:
    STATE OF NEW JERSEY, PLAINTIFF, v. WILLIAM S. CARLUCCIO, HENRY J. LAFFMAN AND JAMES DE CHRISTOFORO, DEFENDANTS.
    Hudson County Court Law Division (Criminal)
    July 29, 1971.

      Mr. Edwin H. Stern, Pirst Assistant Prosecutor, and Mr. Edward T. O’Connor, Jr., Assistant Prosecutor, for plaintiff {Air. Geoffrey Gaulhin, Hudson County Prosecutor, attorney) .

      Air. Dennis D. McAlevy for defendant Carluccio.

      Mr. John P. Russell for defendant Laffman.

      Air. Elmer J. Herrmann, Jr., for defendant De Christoforo.
   Botter, J. S. C.

(temporarily assigned). On this motion to suppress evidence I advised counsel at oral argument that I would grant defendants’ request to cross-examine the detective upon whose affidavit search warrants issued. The prosecutor asserts that such a hearing cannot be held, but that probable cause must be judged by the affidavit alone. Since this issue has not been decided in this State or by the United States Supreme Court, I have adjourned the proceedings to give the prosecutor an opportunity to seek leave to appeal from my order.

Two search warrants were issued by a Superior Court judge based upon the affidavit of a detective of the New Jersey State Police Organized Crime Task Eorce Bureau. One warrant authorized the search of a specific one-story house in West New York, New Jersey, and persons on the premises; the other authorized the search of an automobile and an unnamed but described person previously seen operating the auto in the vicinity of the premises. The raid, seeking evidence and paraphernalia pertaining to illegal lottery and bookmaking operations, was apparently successful and defendants were indicted for the suspected crimes.

The detective’s affidavit recites in part that:

I, the deponent * * * did receive information from a reliable informant, whose information in the past has proven to be reliable, and which did result in gambling arrests. Said informer did advise the deponent that over telephone number 867-3138 a male who answers said telephone by saying “Willie” is conducting a gambling operation over said telephone, namely bookmaking and/or lottery, and'informer having advised the deponent that he had placed illegal gambling wagers to “Willie” over said telephone.

The affidavit also recites the results of a surveillance of the house in which the telephone was located. The surveillance was on October 3, 6, 7 and 8, 1969. This recital describes comings and goings of unnamed persons between 10:45 a.m. at the earliest and 7:50 p.m. at the latest on the days mentioned. Eor example, on October 3 a male left the side door of a nearby tavern, the Laffman Bar, at 10:45 a.m. and entered the house carrying “a yellow pad and newspaper.” Shortly thereafter a second male arrived carrying “a brown paper bag,” and then a third male came out of the side door of the Laffman Bar and entered the house. This third male then left shortly thereafter and from that time on made six round trips between the tavern and the house, staying in each place for varying intervals. On one trip he placed “slips of white paper into a slot on the door.” On two other trips he delivered a small bag and a white envelope to the house. On the afternoon of October 3 a fourth man arrived in a certain vehicle and entered the house carrying a brown paper bag and then went to the tavern. He drove off later and again returned to the house. Other persons, not described, entered the house at 7:30 p.m.

The first two men who entered the house on October 3 entered again on October 6 at 10:45 a.m., carrying newspapers. At 11:00 a.m. the third male again left the nearby tavern and entered the house. On these occasions each man opened the door with his own key. Nothing else was observed on October 6. On October 7 similar but fewer comings and goings were observed as on October 3, the most suspicious single act being the delivery of a white envelope by the “third man” from the tavern to the house at 2:15 p.m. On the last day, October 8, similar comings and goings were observed, without any slips, bags or envelopes recorded, except that the first two men arrived carrying a newspaper. On the basis of these observations and the information supplied by the “reliable informant” the detective concluded that illegal gambling operations were being conducted at the house and over the telephone there, namely, “bookmaking and/or lottery.”

On the motion to suppress, defendants urged that the affidavit on its face was insufficient to establish probable cause. At oral argument this was rejected. The hearsay report of the “reliable informer,” combined with the surveillance, made out a case for the warrant, although neither the hearsay nor the surveillance was sufficient by itself. United States v. Harris, 403 U. S. 573, 91 S. Ct. 2075, 29 L. Ed. 2d 723 (1971); Jones v. United States, 362 U. S. 257, 80 S. Ct. 725, 4 L. Ed. 2d 697 (1962); State v. Mercurio, 113 N. J. Super. 113 (App. Div. 1970), aff’d o.b. 57 N. J. 367 (1971); State v. Mack, 114 N. J. Super. 513 (App. Div. 1971). See also State v. Kasabucki, 52 N. J. 110 (1968). Cf. Spinelli v. United States, 393 U. S. 410, 89 S. Ct. 584, 21 L. Ed. 2d 637 (1969); Aguilar v. Texas, 378 U. S. 108, 84 S. Ct. 1509, 12 L. Ed. 2d 723 (1964).

Thereupon defendants requested permission to examine the detective (who was present in court at the time of the motion) to test his' credibility solely as to the report of the secret informer. That the informer’s identity is entitled to complete protection in the course of the inquiry was conceded by defendants. State v. Burnett, 42 N. J. 377 (1964); McCray v. Illinois, 386 U. S. 300, 87 S. Ct. 1056, 18 L. Ed. 2d 62 (1966); N. J. S. A. 2A:84A-28.

I

The Fourth Amendment and the New Jersey Constitution (1947) Art. I, par. 7, in almost identical language guarantee the freedom of all people from unreasonable searches and seizures. “No warrants shall issue, but upon probable cause supported by oath or affirmation * * *,” is a covenant exacted to protect the people against arbitrary transgression by government officers. Boyd v. United States, 116 U. S. 616, 625, 6 S. Ct. 524, 29 L. Ed. 746 (1885). Abusive writs of assistance, infringing upon privacy, “inaugurated the resistance of the colonies to the oppressions of the mother country." I bid. This constitutional safeguard is of greater importance today. Today the threat of search by invisible intrusion, by electronic surveillance — bugging and wiretapping and intercepting •— hangs over every citizen like a cloud. Although the rules in search and seizure cases draw criticism day by day, even in opinions by our most esteemed judges, in my view a diminution of the Fourth Amendment will cost our citizens the price of liberty that no increase in the number of convictions is worth. The answer to unlawful searches is not to sanction them because some police officers are recalcitrant. The answer is to end unlawful searches. At least we must strive for this goal. We have not abandoned the criminal laws because they have failed to deter all crime.

Our system of justice is not disgraced by the acquittal of a defendant because illegally seized evidence cannot be' used against him. I believe our system is ennobled by this rule. Judges uplift our system to the degree in which constitutional rights are enforced in a full and sympathetic spirit. Nor is the public uniformly dismayed by the discharge of an accused when the law requires that result. Trial courts see this often enough when juries acquit despite a mass of evidence lawfully seized. Juries acquitted defendants in 43% of 49 illegal gambling cases studied in the mid-1950’s. Kalven & Zeisel, The American Jury, 67, 74 (1968). This was before the adoption of the rule that no comment or inference of guilt can be based upon defendant’s failure to testify in his own defense, Griffin v. California, 380 U. S. 609, 85 S. Ct. 1229, 14 L. Ed. 2d 106 (1965), and before the exclusionary rule of Mapp v. Ohio, infra, was applied to the states. Juries show a high rate of leniency as compared with the willingness of judges to convict, particularly in gambling cases, and it is in these eases that a high proportion of motions to suppress are now made. Oaks, infra, 37 U. Chi. L. Rev. at 681.

Juries are not dismayed by the right of a man to be silent, to be presumed innocent, by the need for proof beyond a reasonable doubt.

Studies of 3576 criminal cases show that, where judges disagreed with the verdict of juries, judges thought convictions were warranted in roughly 50% of the cases in which juries acquitted defendants. Kalven & Zeisel, op. cit. at 58. Of course, the constitutional rights of an accused make it more difficult to convict him. However, juries acquit for many reasons unrelated to evidence legally seized. To some extent, in gambling cases for example, they acquit because the State has legalized betting at tracks and, now, with the New Jersey Lottery, all over the State. There is some evidence that a jury will acquit “in protest against a police or prosecution practice that it considers improper.” Kalven & Zeisel, op. cit. at 319. Thus, the public may not be agonized by the suppression of evidence seized illegally when the guilt of an accused has not yet been established, and might not be even if the evidence could be used. The assumption that we are always discharging people who would otherwise be convicted is not valid. The foregoing statistics belie the charge that crime in America, bad as it is, is caused by judges who are too soft. This accusation should not stampede us into surrendering our constitutional liberties. If more convictions are wanted, or less crime, many steps can be taken without abandoning the Bill of Bights.

The right to be secure from unreasonable searches and seizure must prevail even at the cost of allowing some crimes to go unpunished. Mr. Justice Jackson, dissenting in Brinegar v. United States, 338 U. S. 160, 180-181, 69 S. Ct. 1302, 93 L. Ed. 1879 (1949), has expressed the significance of this great right in modern terms. It goes beyond condemning the “dirty business” of wiretapping. Olmstead v. United States, 277 U. S. 438, 470, 48 S. Ct. 564, 72 L. Ed. 944 (1928) (Mr. Justice Holmes, dissenting). It goes beyond the need to “preserve the judicial process from contamination.” Id. at 484, 48 S. Ct. at 575, Mr. Justice Brandéis dissenting). Mr. Justice Jackson said in Brinegar, supra:

Among deprivations of rights, none is so effective in cowing a population, crushing the spirit of the individual and putting terror in every heart. Uncontrolled search and seizure is one of the first and most effective weapons in the arsenal of every arbitrary government. And one need only briefly to have dwelt and worked among a people possessed of many admirable qualities but deprived of these rights to know that the human personality deteriorates and dignity and self-reliance disappear where homes, persons and possessions are subject at any hour to unheralded search and seizure by the police.
But the right to be secure against searches and seizures is one of the most difficult to protect. Since the officers are themselves the chief invaders, there is no enforcement outside of court.

The right of privacy (Katz v. United States, 389 U. S. 347, 88 S. Ct. 507, 19 L. Ed. 2d 576 (1967)) — to be free of unreasonable searches and seizures — is a part indispensable to the whole of freedom. Without privacy not one man but a whole nation can become cowed and frigid. Without privacy the soul of man withers. This right is the atmosphere of our freedom; it is like the air we. breathe, enveloping, invisible, yet sustaining, so long as it is there. Without it other rights will perish, especially free speech and assembly. What is the right of free speech and assembly if Big Brother is listening? See the innocent conversation recorded by the E. B. I. involving Cassius Clay, his attorney and Dr. Martin Luther King, n. 5, supra.

Evidence seized in violation of the Eourth Amendment is contaminated and cannot be used in a criminal proceeding. Weeks v. United States, 232 U. S. 383, 34 S. Ct. 341, 58 L. Ed. 652 (1914); Mapp v. Ohio, 367 U. S. 643, 81 S. Ct. 1684, 6 L. Ed. 2d 1081 (1961); Spinelli v. United States, supra. This is one incident of the violation of a person's constitutional rights. Other means are needed to vindicate such rights. One has been established by way of a federal action for damages against the wrongdoer. Bivens case, supra, n. 6. See also, 42 U. S. C. § 1983 (1964), creating a federal cause of action against state officials. Bivens, 91 S. Ct. at 2020. (Mr. Justice Black, dissenting).

II

Shall a defendant have the right to a hearing to prove that statements of material facts in an affidavit used to procure a warrant are fictitious?

That police officers have knowingly and intentionally disregarded the need for a search warrant is disclosed by the many cases before us. In fact, the argument is now in vogue that we should slowly abandon the exclusionary rule, whatever the cost to our constitutional rights, because police officers will fabricate testimony to establish probable cause lor an arrest and an incidental search without a warrant. Examples are the so-called “dropsie” cases where evidence is dropped, and “plain view” cases where weapons normally concealed are discovered to be carelessly left exposed.

To deny the defendant the right to prove the falsity of a material avowal, intentionally contrived to obtain a search warrant, is to say that facts alone insufficient for a warrant become sufficient if augmented by facts invented by a police officer. The affidavit is used to invoke the jurisdiction and obtain the process of the court. If perjurious in material respects, it corrupts the process, and the process should be voided as fraudulently obtained. We are not speaking here of erroneous, immaterial statements or honest mistakes. See Rugendorf v. United States, supra, n. 2, 376 U. S. at 532-533, 84 S. Ct. 825; State v. Bisaccia, 58 N. J. 586 (1971). A rule that permits a showing of intentional falsity will attack the “evil sought to be ended,” namely, “insolence in office,” given in Bisaccia, supra, as the reason for the exclusionary rule.

There is a conflict in the cases as to whether a hearing should be permitted to test the truth of an affidavit underlying the warrant. In Rugendorf v. United States, supra, n. 2, 376 U. S. at 531-532, 84 S. Ct. at 827, the United States Supreme Court said that it had never “passed directly on the extent to which a court may permit such an examination” (emphasis added), hut the court assumed that such an attack could be made for the purpose of its decision. Our highest court has noted that the warrant may issue ex parte, “with, as yet, unclear limits upon what may be disputed upon a motion to suppress.” State v. Burnett, supra, n. 1, 42 N. J. at 388. At times testimony has been taken at the hearing to suppress, often for the purpose of upholding the warrant and supplementing the record made before the issuing judge. State v. Clemente, 108 N. J. Super. 189 (App. Div. 1969), is an example. There the State produced the detective who procured the warrant, and the defense called the municipal court judge who issued it. This procedure to expand what was before the issuing judge has now been condemned as contrary to R. 3 :5-6. State v. Stolzman, 115 N. J. Super. 231 (App. Div. 1971). However, some kind of hearing is implied by State v. Bisaccia, supra, holding that a warrant issued for 371 10th Street was validly executed at 375 10th Street, the building in fact intended to be searched, but mistakenly numbered in the affidavit and warrant. In State v. Smith, supra, n. 1, the question was expressly left open, but the case was decided on the assumption that the warrant was invalid because the affiant knew the affidavit to be false in a material respect.

Mutuality of remedy for the State and a defendant is not the issue. The State has the opportunity to rely on hearsay and make out its case ex parte. The burden of proof in attacking a search warrant is on the defendant. State v. Mark, 46 N. J. 262, 273 (1966). Although the State is limited to its affidavit and the transcript or suminary of the ex parte proceeding filed by the issuing judge, Blolzman, supra, there should still be room to show in exceptional eases typographical or other honest errors to sustain a warrant, such as in Bisaccia, supra, n. 6. But the defendant should not be precluded from attacking the affidavit. A defendant must be allowed to prove fraud or falsity by other evidence. There will be no other way in most cases where a secret informer is involved. See King v. United States, 282 F. 2d 398 (4 Cir. 1960), where testimony established that the person accompanying federal officers apparently used someone else’s name in signing the affidavit. To deny a hearing would preclude the traditional right of confrontation of witnesses, the right to ascertain the truth in an adversary proceeding. Testing truth by cross-examination is a vital and distinctive feature of the Anglo-American system of law. 5 Wigmore on Evidence (3rd ed. 1940) § 1367 at 28 et seq.; see Alderman v. United States, supra, 394 U. S. at 183-184, 89 S. Ct. 961.

Most federal courts and some states have allowed a defendant to challenge the averments in the affidavit, while the majority of states are opposed. In California, section 1539 of the Penal Code requires a magistrate to take testimony if the “grounds on which the warrant was issued be controverted.” See Aday v. Superior Court of Alameda County, 55 Cal. 2d 789, 13 Cal. Rptr. 415, 362 P. 2d 47 (Sup. Ct. 1961). Iu New York the Court of Appeals, in People v. Alfinito, supra, n. 10, held that a hearing was proper to determine whether the affidavit was perjurious, with the burden of proof on defendant and doubt to he decided in favor of the warrant. The court said:

Modern thought which produced the decision in Mapp v. Ohio * «• * would make incongruous any holding that a search warrant is beyond attack even on proof that the allegations on which it was based were perjured. Our duty is to fashion a rule which will prevent such a violation of the citizen’s rights and at the same time avoid creating a situation where overstrict rules would invalidate numerous warrants simply because witnesses can later- be found to swear to the opposite of what the officer swore when he procured the warrant. [16 N. Y. 2d at 185-186, 264 N. Y. S. 2d at 246, 211 N. E. 2d at 646]

In People v. Bak, supra, n. 11, the Supreme Court of Illinois conceded that persuasive arguments could be made for the other side, but held that a suppression hearing must he limited to an examination of the face of the complaint and warrant. The reasons given were that (a) intentional misrepresentations could be punished; (b) the protection of informers may be impaired by such a hearing, and (c) it would produce the undesirable result of one judicial officer evaluating the affiant’s credibility and another reassessing it at the suppression hearing. The first reason I would answer by reference to my views expressed in Part I above. The availability of punishment, a doubtful remedy (see Oaks, supra, 37 U. Chi. L. Rev. at 673), should not preclude another means to vindicate a constitutional right. The answer to the second reason has been given in State v. Burrachio, 39 N. J. 272, 275 (1963), where a similar argument was rejected. Obviousty, the court must limit the inquiry in order to protect the informer. A similar problem may be presented in the trial on the merits. The answer to the third reason advanced is that existing procedures permit a judge to review a warrant issued by another judicial officer. The only question is whether to substitute a hearing, when circumstances justify it, so that an adversary procedure can be substituted for a pure review.

All articles on the subject agree that in appropriate circumstances a hearing should be afforded so that defendant may show the warrant was secured unlawfully. Note, “Testing the Factual Basis for a Search Warrant,” 67 Colum. L. Rev. 1529 (1967); Kipperman, “Inaccurate Search Warrant Affidavits as a Ground for Suppressing Evidence,” 84 Harv. L. Rev. 825 (1971); Mascolo, “Impeaching the Credibility of Affidavits for Search Warrants; Piercing the Presumption of Validity,” 44 Conn. B. J. 9 (1970); Note, 51 Cornell L. Q. 822 (1966); Note, 34 Fordham L. Rev. 740 (1966); Note, 15 Buffalo L. Rev. 712 (1966); Note, 32 Brooklyn L. Rev. 423 (1966). Differences in opinion are registered as to the showing which must be made to succeed. All agree, however, that deliberate falsity justifies suppression.

Ill

In the case at hand defendants seek to examine the detective solely as to his averments concerning the “reliable informer.” Questions will be circumscribed to protect the informer’s identity. It will be difficult to prove the intentional falsity of statements attributed to an informer. Except for cross-examination, however, defendants have no other practical way to proceed.

The prosecutor argues that even if a testimonial hearing is to be allowed in some cases, no showing has been made here to raise any doubt concerning the informer’s report. Obviously, defendants had not furnished an affidavit contradicting the hearsay report of an undisclosed person. But a hearsay report must be inherently credible. State v. Christy, 112 N. J. Super. 48, 68 (Cty. Ct. 1970). Here some glimmer of doubt, sufficient to justify closer inquiry, is presented by the affidavit itself.

The hearsay report recites that the informer said he placed illegal gambling wagers with a man named Willie over the telephone and that Willie is conducting a gambling operation, “namely, bookmaking and/or lottery.” Certainly if the informer placed bets with Willie he would know whether it was bookmaking (wagers on sporting contests, such as horse races), or lottery (numbers) or both. It may be that the “and/or” is simply the detective’s language, his own legalistic translation of what the informer said. But some other conclusion may be drawn after the detective testifies. Also, it is noted that nowhere in the affidavit or search warrant is a last name given for Willie. In fact, except for the person in whose name the telephone was listed, and the person in whose name the car was registered, neither of whom was indicted, no full name of any person is given in the affidavit or search warrant. Defendants suggest that it is doubtful that a person could place a bet by phone with someone with whom he was not well acquainted. Wagers have to be delivered and winnings paid off. Yet no identification was given by the informer of anyone in the operation except a man named Willie, not otherwise described.

On the surface the affidavit makes out probable cause. However, the only fair test of the credibility of the report concerning the informer is to afford defendants the opportunity of cross-examination. Testimony need not be believed if it is inherently improbable, especially if no one is available to contradict it. See In re Perrone, 5 N. J. 514, 522 (1950); Ferdinand v. Agricultural Ins. Co. of Watertown, N. Y., 22 N. J. 482 (1956). Probable cause means “suspicion of guilt that is well grounded; a reasonable basis for a belief that a crime has been or is being committed.” State v. Kasabucki, supra, at 116. This is the ultimate test in a suppression hearing. My holding is that there can and should be such a hearing, with the right afforded defendants to offer testimony in this case.

      See State v. Burnett, 42 N. J. 377, 388 (1964); State v. Smith, 113 N. J. Super. 120, 128 (App. Div. 1971).

        Rugendorf v. United States, 376 U. S. 528, 531-532, 84 S. Ct. 825, 11 L. Ed. 2d 887 (1963).

      Defendants Carluceio and Laffman also urged that the search warrant was invalid as to them, and that searching them as they entered the house was invalid, since they had not been particularly described in the search warrants. State v. Masco, 103 N. J. Super. 277 (App. Div. 1968). The prosecutor concedes the invalidity of the search warrant as authority to search unnamed persons not otherwise described in the warrant, but contends that such search, nevertheless, was incidental to a lawful arrest. Testimony of the detective has not been taken on this issue and it remains open.

      See Coolidge v. New Hampshire, 403 U. S. 443, 91 S. Ct. 2022, 2032, 29 L. Ed. 2d 564 (1971), where the court said, in an opinion by Mr. Justice Stewart:
      In times of unrest, whether caused by crime or racial conflict or fear of internal subversion, this basic law and the values that it presents may appear unrealistic or “extravagant” to some. But the values were those of the authors of our fundamental constitutional concepts. In times not altogether unlike our own they won— by legal and constitutional means in England, and by revolution on this cont.nent — a right of personal security against arbitrary intrusions by official power. If times have changed, reducing every man’s scope to do as he pleases in an urban and industrial world, the changes have made the values served by the Fourth Amendment more, not less, important.

      See: Westin, “Science, Privacy, and Freedom: Issues and Proposals for the 1970’s,” 66 Colum. L. Rev. 1003 (1966); Alderman v. United States, 394 U. S. 165, 89 S. Ct. 961, 22 L. Ed. 2d 176 (1969), holding a defendant’s conversation, or conversations on his premises, cannot be unlawfully intercepted, but that he has no standing to object to the unlawful electronic eavesdropping directed at another person, even though this leads to evidence against him; United States v. United States District Court, 444 F. 2d 651 (6 Cir., April 8, 1971), holding that government wiretaps without a warrant are illegal in domestic security cases; United States v. Clay, 430 F. 2d 165 (5 Cir. 1970), rev’d on other grounds, 403 U. S. 698, 91 S. Ct. 2068, 29 L. Ed. 2d 810 (1971). In the Clay case the government admitted to four illegal wiretaps, recording conversations of Cassius Clay (also known as Muhammed Ali). It was revealed that Rev. Dr. Martin Luther King’s telephone had been tapped (430 F. 2d at 168). Later testimony of an F.B.I. agent disclosed that the F.B.I. had kept a telephone surveillance on Dr. King for several years before his death. Neiv Yorh Times, June 5, 1969, at 27. In one conversation Clay’s attorney, Chauncey Eskridge, called from Clay’s residence in Miami to Dr. King at his home in Atlanta. Clay spoke on an extension phone. This conversation was in 1964. Recorded notations showed an exchange of friendly words, and ended with Clay warning Dr. King to take care of himself and “watch out for them whities.” Ibid. at 168.

      See opinion of Burger, C. J., dissenting, Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U. S. 388, 91 S. Ct. 1999, 29 L. Ed. 2d 619 (1971) (Harlan, J., concurring, Black, J., concurring and dissenting, and Blackman, J., joining Black, J., in part); Coolidge v. New Hampshire, supra, n. 4; Weintraub, C. J., State v. Bisaccia, 58 N. J. 586 (1971).

        Marcus v. Search Warrants, etc., 367 U. S. 717, 724—729, 81 S. Ct. 1708, 6 L. Ed. 2d 1127 (1961).

      See: Oaks, “Studying the Exclusionary Rule in Search and Seizure, 37 U. Chi. L. Rev. 665 (1970). Mapp. v. Ohio, supra, is an example. There three police officers entered Miss Mapp's residence looking for someone wanted for questioning about a bombing, and looking for lottery paraphernalia. They pretended to have a search warrant, -went through her personal papers and made a widespread search of the premises. They found obscene photographs and convicted Miss Mapp for unlawful possession.

      See Burger, C. J., in Bivens, supra, n. 6, 91 S. Ct. at 2014-2015; Oakes, supra, n. 8, 37 U. Chi. L. Rev. at 698, 708.

         United States v. Pearce, 275 F. 2d 318 (7 Cir. 1960); United States v. Roth, 391 F. 2d 507 (7 Cir. 1967); King v. United States, supra; United States v. Halsey, 257 F. Supp. 1002 (S. D. N. Y. 1962), aff’d on other grounds, mem. No. 31369 (2 Cir. 1967); People v. Alfinito, 16 N. Y. 2d 181, 264 N. Y. S. 2d 243, 211 N. E. 2d 644 (Ct. App. 1965); O’Bean v. State, 184 So. 2d 635 (Miss Sup. Ct. 1966). See also, United States v. Gillette, 383 F. 2d 843, 848-849 (2 Cir. 1967); United States v. Freeman, 358 F. 2d 459, 463, n. 4 (2 Cir. 1966); United States v. Poppitt, 227 F. Supp. 73, 77 (D. Del. 1964).

         People v. Bak, 45 Ill. 2d 140, 258 N. E. 2d 341 (Sup. Ct. 1970), cert. den. 400 U. S. 882, 91 S. Ct. 117, 27 L. Ed. 2d 121 (1970); Tucker v. State, 244 Md. 488, 224 A. 2d 111 (Ct. App. 1966), cert. den. 386 U. S. 1024, 87 S. Ct. 1381, 18 L. Ed. 2d 463 (1967); Baker v. State, 448 P. 2d 282 (Okla. Ct. Crim. App. 1968); Owens v. State, 217 Tenn. 544, 399 S. W. 2d 507 (Tenn. Sup. Ct. 1966); Griffey v. State, 168 Tex. Cr. R. 338, 327 S. W. 2d 585 (Ct. Crim. App. 1959).

      See Halsey, supra, n. 10, assessing other considerations of a practical nature.


author: Bedford, J. D. C.

text:
    ALMOR FURNITURE & APPLIANCES, INC., A CORPORATION OF NEW JERSEY, PLAINTIFF, v. LOUIS MacMILLAN, RUTH MacMILLAN AND JOHN DOE, BEING THE PARTY IN POSSESSION, DEFENDANTS.
    District Court Essex County
    Decided July 29, 1971.

      Mr. Joseph Samson for plaintiff (Messrs. Heilman & Samson, attorneys).

      Mr. Richard N. Tilton of the Newark Legal Services Project, for. defendants.
   Bedford, J. D. C.

Plaintiff instituted these proceedings and obtained a writ of replevin, pursuant to the provisions of N. J. S. A. 2A.-59-1 et seq., which was executed by a constable of the Essex County District Court. The writ was obtained by posting a bond in double the certified value of the property, and the property was taken into custody by the constable, who then filed his certificate setting forth the essential facts of the taking.

In April 1970 defendants purchased from the plaintiff household furniture consisting of a living room and a dining room suite, at a sales price of $1575 on which a total deposit of $500 was made. The balance was financed under a 36-monthly payment retail installment contract, which was in the amount of $1397.16 when the finance charge was added.

Defendants made certain payments but were in arrears in April 1971, and demand was made by mail for the immediate delivery of possession of the furniture to plaintiff, or that defendants pay the demanded balance of $1086.29. The property was taken on May 20, 1971, following which defendants sought legal advice from the Newark Legal Services Project and now move for a declaration that the replevin statute is unconstitutional. At a hearing on the motion, Aaron Schwartz, the Essex County District Court constable, testified that on May 20, 1971 he executed the writ by going to defendants’ apartment and, with the permission of defendants’ landlord, gained entrance through the services of a locksmith. Defendants were not at home. In the presence of two police officers, and. with the assistance of movers provided by plaintiff, the furniture was taken and the writ left behind on a table in the living room. Defendants now allege that additional property, not within the conditional sales contract, is missing and presumed taken. The constable has certified that only items within the contract were removed from defendants’ apartment.

Defendant Louis MacMillan has filed an affidavit that lie is presently unemployed, that defendants’ sole source of income is $88 a week earned by his wife, and they cannot post a bond to obtain the release of the property. Eor the purposes of this motion, the truth of his affidavit is assumed.

Defendants raise three questions arising under the United States Constitution in support of their contention that our replevin statute is unconstitutional: (1) it denies “due process” in the taking of property because there is no requirement of notice or a judicial hearing prior to the taking; (2) it permits a violation of the Fourth Amendment prohibiting unreasonable searches and seizures, and (3) there is a denial of the equal protection of the laws guaranteed by the Fourteenth Amendment where defendants, by reason of poverty and lack of credit resources, cannot afford the replevin bond provided for in the statute.

Many of defendants’ arguments are persuasive, especially in the light of the recent trend for consumer protection and the rights of the poor to equal application of the laws, some of which “rights” cost money. It may also be true that the replevin procedure, unchanged in its essential details for more than a century, was originally designed to test the true title to property associated with an entirely different era, e. g., wagons, logs, cows, timber, horses, etc. However, it has become, for good or ill, part of the fabric of our modern financing, ranging from furniture to ears, from commercial items to large industrial equipment; large and small property is sold, by retailers, wholesalers and manufacturers, on the basis of a secured interest and an installment payment plan. But for the availability to the seller-creditor of a procedure to obtain repossession, the property might not have been sold, or sold at the price of the installment contract.

Apparently two courts have declared replevin laws similar to those of New Jersey to be unconstitutional, one a federal District Court, Laprease v. Raymours Furniture, 315 F. Supp. 716 (D. C. N. D. N. Y. 1970). The other is a Michigan Common Pleas Court, City of Detroit case, entitled Westinghouse Credit Corp. v. Edwards, cited to this court as appearing in CCH Poverty Law Reports, June 28, 1971, No. 13,366 at 12,977, but not reported officially, opinion dated November 30, 1970. In two states, Florida and Oklahoma, similar statutes have been held constitutional bjr federal courts: Fuentes v. Faircloth, 317 F. Supp. 954 (D. C. S. D. Fla. 1970), and Brunswick Corp. v. J. & P. Inc., 424 F. 2d 100 (10 Cir. 1970).

Defendants rely on several United States Supreme Court cases in support of their position on the Fourteenth Amendment due process question: Windsor v. McVeigh, 93 U. S. 274, 23 L. Ed. 914 (1876) (seizure of rebel property during the Civil War); Coe v. Armour Fertilizer Works, 237 U. S. 413, 35 S. Ct. 625, 59 L. Ed. 1027 (1915) (writ of execution against a stockholder of defendant corporation against which the judgment had been obtained); Joint Anti-Fascist Committee v. McGrath, 341 U. S. 123, 71 S. Ct. 624, 95 L. Ed. 817 (1951) (placing plaintiff on the Attorney General’s subversive list without hearing); Schroeder v. City of New York, 371 U. S. 208, 83 S. Ct. 279, 9 L. Ed. 2d 255 (1962) (eminent domain; jurisdiction acquired by notice bjr publication when defendant available for personal service); Sniadach v. Family Finance Corp., 395 U. S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349 (1969) (garnishment of one-half salary without notice under Wisconsin statute), and Goldberg v. Kelly, 397 U. S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970) (changing welfare recipient’s status without hearing). However, each is distinguishable as dealing with a special situation and cannot be completely analogized to the present issues.

Xo decision construing the New Jersey replevin statute has questioned its constitutionality. Indeed, the subject seems never to have been raised. The statutory procedure arises out of old common law actions, and is related to detainer and trover. The present statutory scheme is derived from the Revision of 1877, with a modernizing review and reform in 1948. Apparently the section permitting the breaking into and seizure, N. J. 8. A. 2A:59-4, has not been questioned since its inception.

Perhaps it is time to have a complete review of the performance of the replevin statute in light of commercial and financial transactions in the 1970’s. However, this court does not feel that the security permitted and approved by the relatively recently enacted Uniform Commercial Code should be jeopardized by a sudden declaration of unconstitutionality of one of the remedies relied upon by sellers in security transactions.

It is true, as asserted by defendants, that the application of the Fourth Amendment against unreasonable searches and seizures was not decided in Fuentes v. Faircloth, 317 F. Supp. 954 (D. C. S. D. Fla. 1970), since the facts did not involve a breaking into and entering, as do the facts in the instant matter. However, defendants signed a contract which provided that, in the event of failure to make any of the payments, the entire balance would become due, and upon demand or notice the seller could retake the property “wherever located.” In reliance on this and the replevin statute, plaintiff took defendants5 conditionally sold furniture by a procedure sanctioned by the statute. A higher court should review the constitutionality of the statute, in view of the conflicting values in issue and the impact a declaration of unconstitutionality would have on credit purchases already transacted.

In the meantime, we do not feel that defendants are cheated out of their expectations. Almost every time-buyer knows, or is charged with knowing, “If you don’t pay, they take it away.” There remain protections for defendants in the trial of the action, in which all the defenses can be raised and decided in the county district court.

The Attorney General of New Jersey was notified of the pending application in accordance with- R. 4:28-4 and did not appear. Defendants’ motion' is denied and the - matter should proceed to prompt trial.