*1 KING, PLAINTIFF-APPELLANT, B. v. SOUTH WILLIAM BANK, JERSEY NATIONAL DEFENDANT-RESPONDENT. Rеargued September 9, 1974 Decided December 1974.
165 Zeller, Services, Legal Mr. Allen S. of Camden Regional Messrs. Saul the cause for the argued plaintiff-appellant; Ferster and Carl on the brief. Bisgaier, S. E. Jack N. Mill Messrs. William argued Reifsteck Farr, Messrs. &
cause defendant-respondent; Reifsteck Wolf, attorneys. Court was delivered opinion
Hughes, C. J. as invalid Challenging an automobile creditor, secured after (by pay default ment) this appeal primarily constitutional suggests infirmity in N. J. 12A:9-503, 8. A. New part Jersey Uniform Code.1 invokes, Commercial It in the name of constitutional reach of right, conceptual which would policy provide protection in the such as marketplace in cases typified by Shevin, Fuentes v. 67, 407 1983, U. S. Ct. L. Ed. S. 2d 556 reh. 902, den. S. Ct. (1972), 177, U. 93 S. L. Ed. 2d 165.2
The relevant facts
procedural
history, uncomplicated
and not in dispute, are these:
William B.
appellant,
King
(plaintiff) purchased and received an automobile from a
Party’s Right
1Secured
Take
Possession After Defatilt.
agreed
party
Unless otherwise
a secured
has on default the
possession
possession
taking
take
party
of the collateral.
In
a secured
may
proceed
judicial process
without
if this can be done with-
peace may proceed by
out breach of the
27.
action.
J. S. A. 12A-.9-
503.
Supreme
2In
replevin
Puentes the
Court declared unconstitutional
Pennsylvania
statutes in Florida and
-which authorized state officials
property
providing
possessor
op
to seize
withоut
and an
notice
portunity
holding
severely limited,
to be heard. This
was
not over
if
ruled, by
Grant,
600,
Mitchell
v. W. T.
416 U.
S.
S. Ct.
(1974),
L. Ed.
2d 406
where found no
court
constitutional
sequestration
in a
fault
Louisiana
statute which authorized seizures
bearing much constitutional
resemblance to those condemned in
opinions
Powell, J., concurring,
Puentes. See
Upon delivery automobile tract, the respondent the seller the latter to South assigned an Jersey Bank). National Bank Plaintiff (the defaulted at- had been called to his monthly (which payment overdue tention invoked ac- by thereupon and the Bank notice) celeration and its peaceably clause of the contract exercised to automobile repossess plaintiff, without notice to as the contract it do. Plaintiff to authorized later offered defaulted was make this good payment, rejected but only he car would if he was informed the returned due. the full balance paid remaining a Bank sent notice that the automobile plaintiff would On the same day plaintiff be sold at auction.3 filed public an Chanceiy Division obtained order complaint the sale "a Before temporarily pending hearing. restraining data was reached was consent order entered hearing certain the automobile under conditions returning plaintiff here Plaintiff then filed an amended complaint pertinent. counts, three for con- damages tortious containing circumstances) required (except special was under 3Such notice (W. J. 8. Uniform Commercial Code another section * “* 12A:9-504) providing notification the time reasonable * * * party place any public sent the secured sale shall be * * debtor, *6 automobile, of for version the for (2) damages the unlawful conversion of which personal property was the automobile4 and N. declaratory 8. A. 12A: judgment that J. seeking 9-503, was supra, unconstitutional on its face and as applied and that the acceleration clause the retail installment sales contract was unconscionable. held,
After answer filed and Bank pretrial conference the. for moved and with a summary judgment plaintiff countered similar motion. summary The trial court granted judgment for Bank, of com- the the first and third counts the dismissing plaint, thus re- the constitutional upholding validity the possession and claim un- its incidents and negating conscionability. summary judg- Plaintiff from this appealed ment order and his motion for certifica- this granted Court tion under B. 2:12-2 while the appeal was unheard pending in the Division, Appellate 63 N. J. 561 (1973).
Count one (unlawful falls unless three conversion) count (invalidity seizure and unconscionability contract) is upheld, and hence our attention is directed the validity of the allegations from claim latter count. Aside that the acceleration clause in the unconscion- contract was able we shall (which briefly mention hereafter), plaintiff’s denunciation of the and plea judicial his repudiation :9-503, N. 8. A. 12A were supra, predicated entirely upon made in one proposition of his charge amended complaint: Repossession by allegedly 14. said vehicle defendant was author- by pursuant
ized
and taken
to N. J. 8. A. 12A:9-503.
aBy
pretrial stipulation the Bank made clear its conten-
contra,
tion
its
was
retaking
on its
con-
private
based
tractual
and not under the
N.
rights
authority J. 8.
voluntarily
4The second count was later
dismissed and is not rele-
vant here.
or co-
assistance
without
and hence
12A:9-503, supra,
state.
or involvement of the
operation
i.e.,
dis
issue,
constitutional
This refinement
ac
and “state
action
or individual
between private
tinction
clauses
due
process
protection
to the
subject
equal
tion”
Amendment,
by
understood
clearly
was
of the Fourteenth
summary disposition
supporting
Its opinion
court.
trial
dichotomy be
the “essential
dealt with
accurately
fully
State, which
prohibited
action
discriminatory
tween
conduct, Tlow
Clause,
private
Protection
Equal
clause
which that
against
discriminatory
wrongful/
ever
”
Irvis,
407 U. S.
No. 107
Lodge
Moose
no
‘erects
shield/
L. Ed.
1965, 1971,
(1972);
2d
163, 172, 92 S. Ct.
*7
Kraemer,
842, 92
1, 13,
836,
Ct.
U.
68 S.
334
S.
Shelley v.
Cases,
Civil
109
;5
Rights
1161,
L. Ed.
1180 (1948)
18,
L. Ed.
The same
3,
phi
Ct.
27
835 (1883).
U. S.
3 S.
Due Process Clause.
obviously applies to
losophy
determined,
had
held in
com-
been
Thus the court
Motors, Inc.,
121
v. Sandy
ease
parable
(Messenger
was private
1
Div.
Super.
1972)) that
(Ch.
action,
was
a state
and so
contractual matter
rather
than
sup-
from
attack. This conclusion is
immune
constitutional
majority
an
federal and state
ported
overwhelming
times)
which have held
recent
that
(many
very
courts
is
color of
laws
not an act under
state
“self-help” repossession
is
thus no state action
involved.6
* **5“
principle
firmly imbedded in our constitu
has become
tional
law
inhibited
the first section of the Four
the action
may fairly
only
to be
teenth
such action as
said
Amendment
against merely
that of
That Amendment erects no shield
the States.
* *
private
[Shelley
Kraemer,
supra]
v.
conduct
1974) ;
Motors,
(6th
Impala
2d
6Turner v.
503 F.
607
Cir.
;
Titelman,
1974) Brantley
(3d
v.
v.
169 men that the statute discussing argument Before came within under it taken action allegedly tioned. accelera that the we note the claim theory, action” the “state scrutiny Our was unconscionable. contract tion clause would us justify nothing shows of the factual record in such clause, universally acceptable that such declaring its exercise is, or in in the business world transactions and extraordinary was, In the absence this case unconscionable. unfair or grossly oppression demonstrating circumstances with the not or conflict here dealing present, the like Owen, 50 N. J. 101 v. (cf. the state Unico public policy court should declare unconscionable (1967)), de- and for self-help repossession for acceleration provisions 1974), Hosp. Bank, (1st Trust 496 F. 2d Island Nat’l 927 Cir. Rhode - - (1974) ; --, -, den., cert. 2d 95 Ct. 42 L. Ed. U. S. S. Shirley Pinnixi, 1974) v. State (5th ; v. F. 2d James 495 206 Cir. -, Bank, 1974), (2d F. cert. den.-U. Nat’l S. 2d 739 Cir. 493 329, ; v. Cal. First (1974) Adams Southern 2d 95 S. 42 L. Ed. 284 Bank, -, (9th 1973), F. 2d cert. den.-U. Nat’l S. 492 324 Cir. Labs., Optical v. ; Inc. Bichel 2d S. Ct. 42 L. Ed. 282 95 Marquette (reh. Bank, (8th den. 1973) Nat’l 487 F. 2d Cir. 906 Corp., Supp. (E. Chrysler 1973) ; F. Kinch v. Credit 436 Dec. Finance, Supp. 1973) ; F. Johnson Associates D. Tenn. Union, 1973) Mojica Employees (S. ; v. Automatic Credit D. Ill. Supp. granted 1973), cert. nom. (N. F. sul Gon D. U. Ill. S. Employees Union, 94 S. Ct. zalez v. Automatic Credit U. (1974) ; Electric Shelton v. Credit L. Ed. 2d 562 General Theilig, Kirksey Corp., S.upp. 1973); (M. F. D. Ga. *8 Bank, Supp. ; (D. 1972) F. v. Havelock Nat’l Pease Colo. 351 727 Bank, Supp. 1972) (D. ; First Nat’l Exch. v. Greene F. 351 118 Neb. America, Supp. 1972) ; (W. F. Oller v. Bank D. 342 672 Va. 348 of Bank, Supp. (N. ; 1972) McCormick v. First Nаt’l F. 21 D. 322 Cal. Bank, Supp. 1971) ; (S. v. Nat’l F. United States Brown D. Fla. 604 Hight Belgrade Bank, Sup. ; (Ore. 1973) P. 2d v. State 509 442 Ct. moot, appeal (Mont. Sup. 1973), P. 2d cert. dismissed as 514 766 Ct. - ; -, 2d 42 L. Ed. den. 95 S. 266 U. S. Ct. Brinkley, (Fla. Sup. v. So. 2d Northside Motors Ct. 282 617 ; Giglio Delaware, 1973) (Del. Bank A. Ch. 2d 816 Inc., Sandy supra. Contra, 1973) Messenger Motors, ; Watson v. County Bank, Supp. 1974) ; (W. F. Branch Boland D. Mich. Co., (D. County Supp. v. Essex Bank & Trust 361 F. Mass. 1973). liberatefy to agreed in contract the between in parties this ease. the main
On issue it must first be noticed that right self-help circum property under here, stances such as involved far from created being (and thus the fruit of N. J. A. 12Á action”) by “state 8. :9- 503, supra, or that statute’s 16 of predecessor, Section J. A. Uniform Conditional Sales Act codified N. 8. 46:32- in deep has roots the common law and recog has been Maitland, 2 Pollock & nized for centuries. History The Blackstone, English Law (2d ed. Commentaries 1952), England the Laws 857-858 T. (4th Cooley 1899). ed. Nor did the Uniform Commercial Code or its stat predecessor ute such a law distort common had the Elorida and as right, Fuentes, .Pennsjdvania (invalidated statutes which supra) had so altered ancient radically remedy that, replevin Justice Stewart said “they bear little resemblance very it.” U. S. at L. S. Ct. at Ed. 2d at [407 569] A. New Comment 8. Jersey Study pertaining 12A:9-503 mentions: provisions of R. 8. 46:32-22 This section carries forward the * * the Uniform Sales Act Pursuant to this section Conditional *. party parte may possession ex if secured such can be done take * * peace breach
without *. the same token Uniform Commercial Com- By Code N. A. ment to J. 8. 12A:9-503 that: suggests * * * provisions This Article fоllows the of the earlier uniform legislation allowing party posses- the secured most cases to take * * judicial process sion without the issuance of *. New Comment to N.
Again,
Study
8.
Jersey
12A:9-504
to the
(outlining safeguards
debtor in connec-
tion
with
the secured
that:
disposal
property) suggests
* * *
designed
give
party
This
section
secured
the utmost
disposition
only
subject
freedom of action in
of the collateral
to the
“commercially
requirement.
reasonable”
*9
men-
Comment
the last
Commercial Code
The Uniform
the
the
emphasizes
requirement
section also
tioned
must be
of
article
method
disposition
repossessed
certain safeguards
reasonable” and
"commercially
applies
accounting
with
respect
disposition,
such post-seizure
of
debt.
proceeds
outstanding
sale to
the
satisfy
of
of
safeguards
inclusion
such
purpose
primary
of
in
Sales Act was protection
the Uniform Conditional
Jackson,
Co.,
N.
Super.
J.
Discount
v.
Inc.
buyer, Pacific
N. J. 169
rev’d
other
1961)
grounds,
331 (App.
Div.
J.
Meyers,
(App.
Inc.
N.
Super.
Bancredit
(1969);
Lawley,
Corp.
Commercial Credit
Div. 1960);
Motor Co. v.
Super.
1957);
907 (App.
Div.
Plainfield
Salamon,
(D.
1935),
N. Misc.
If, substance codification of more than amounted to no predеcessor its post-seizure additional they prorided (albeit law existing with notice in connection buyer original safeguards to justified asserting 7Viewing security a claim holder one goods peaceably thought title, one’s that “the to retake it was [Branston, beyond The Forcible all doubt.” ‘seemed’ to be established Reception Chattels, ] Rev. Q. 28 L. at remedy by reprisal Recaption species of or is another “II. any injured. happens, party hath de- This when one mere act of the * * prived property goods personal, or chattels *: another his ** * may lawfully goods claim and in which the owner of the ease them; them, happens find it be not he so wherever retake peace. manner, or a breach The reason attended with riotous may happen obvious; frequently it the owner for this is since justice: doing goods may only opportunity himself his have this * * * away may conveyed destroyed; if he had no be afterwards ordinary If, therefore, speedier remedy process law. he than the again, gain possession property it as to of his without can so contrive proceeding.” justify terror, [2 the law and will his force or favours Blackstone, supra, 857-858] *10 sale, and proceeds like), the it seems disposition obvious by that no new was the mere delineation of this created in the procedure statute. Codification is merely legislative reorganization of law into form. existing acceptable statutory Lеgislative the only but to the end that energy expended, law should remain the created or same. has been Nothing destroyed (at least with section regard challenged to the 12A:9-503) and such does legislative activity clearly constitute “state action” Amendment. under the Pourteenth It is in effect common law passive perpetuation as such does not the denial “significantly” involve state in of due As was at process rights. law, common case state is totally removed from process, the repossession least until after event, when certain safe- additional guards come into for the play protection original buyer, junior creditors and owners. subsequent
The
that codification of the common law
concept
amounts
state action
forms of
con
“encouraging”
private
duct,
simply because
the fact of
has been au
legislation,
Motors,
thoritatively
Turner v.
rejected.
503 F.
Impala
2d
607
Bank,
(6th
1974);
Cir.
v.
Nichots
Tower Grove
497 F.
2d
Sales,
404
Cir. 1974); Nowlin v.
Auto
(8th
Professional
Inc.,
F.
2d 16 (8th
den.,-U.
S.-,
Cir.
cert.
1974),
Dentzer,
S. Ct.
L.
Ed.
2d
Bond v.
(1974);
494 F.
Bank,
2d 302
Cir.
(2d
1974);
Nat'l
Shirley
State
In Messenger, supra, Herbert Judge properly adopted philosophy expressed in a brief amicus curiae which had been filed Adams 338 F. Egley, Supp. (S. D. Cal. rev’d sub nom. 1972), Adams v. Southern Cal. First Nat'l Bank, brief, supra. "This filed Professor Mentschikoff on behalf of the permanent editorial board the Uniform Com- 12A:9-503, to Section Code, stated with regard mereial that: supra, codifying generally practice understood It cannot safeguards surrounding lineage honorable it with ancient and practice unconstitutional.8
renders the the Second Circuit Court was otherwise stated same Bond, Shirley, supra, supra, rejecting of Appeals “encouraged” existing mere codification proposal practice: *11 * * * practice encourage [T]he did not Codification the one whit.
legislation by providing greater safeguards made it less attractive * * supra, [Shirley, F. 744] *. 2d at The Fourteenth Amendment was not intended to impose new, the upon inflexible, states doctri sovereign naire of pattern Rather, affirmative rectitude. to sought it values and preserve to be rights sensed inherent in the human condition, states, sure making as viable was con- that the as adapted brief, 8in her article from such which ended the with last sentence, suggested mentioned Professor Mentschikoff economic consequences judicial requiring prior and other action in the con self-help text of as follows: repossessions “(1) opposed peaceful The number as resched- uling payment delinquent increase; (2) accounts would The size deficiency judgments paid by defaulting to be debtors in- would be by involved; (3) general creased the additional costs The interest charged rates to all debtors would rise to take care of the increased salvage resulting losses value in of the collateral from the inevitable delay any procedure attendant court and the increased number of ‘skips’; (4) imposed already Additional burdens be would on an over- system higher paid general burdened public; by court with taxes to be (5) buyers preclude pur- The number of whose credit would rise, affecting chase would factured, thus the total number of cars manu- consequent impact economy; with adverse on our total defaulting might One in thousand conceivably ten debtors be saved days temporary deprivation a week 10-60 use of an auto- Mentschikoff, Repossession mobile.” Under Peaceful Uniform Wm, A Analysis, Commercial Code: Constitutional and Economic Mary £ L. Rev. 769-70 union, federal would membership to be their sidered with action to interfere the equal never law or other dare due withdraw benefits, any except nor of those sharing shield the Amendment erects no Thus it is that process.9 Cases, how- action private Civil Rights supra) against (The freedom to individual states the ever wrongful, leaving Amendment, to their The according lights. deal therewith rather, from action which might immunizes the state people fundamental affirmatively impinge upon significantly to be in their nature rather than so inherent rights, thought created constitution or other human work. by any source way,
Seen
this
it is clear
of state
which
with
broad in con
may
action
basic
rights
interfere
branch
each
cept, including
government having capacity
encroach, whethеr
so to
or executive.10
legislative,
judicial
source of such prohibited
may
action
even be the people
restrained,
themselves, and
such case
too will be
they
from
an amendment to a state
deemed
adopting
constitution
Fourteenth
Mulkey,
(Reitman
Amendment
offensive
387 U. S.
87 S. Ct.
L. Ed.
2d 830 (1967)).11
century
meaning
procedural
9“For
than a
central
more
due
process
rights
clear:
whose
are
affected are
has been
‘Parties
to be
they
they
heard;
may enjoy
and in order that
entitled to
”
*12
supra,
80,
Fuentes,
must first be notified.’
Thus
neutrality,
state
such as here demonstrated in 12A:
9-503,
neither
supra,
nor
commanding
the action
forbidding
contracted for between the
is far from
state en
parties,
Reitman,
couragement
condemned
private wrong
in
supra, that
being
discrimination,
the area of racial
con
duct particularly sensitive and
offensive
at which the
Fourteenth Amendment was
aimed.12 Nor did
significantly
the Bank in its repossession
purport
be
state
exercising
function, as sometimes causes an action taken
aby
private
organization, regulated by the state and
much
given
power,
to seem to
under color
acting
law,
be
of state
thus becoming
accountable under the Fourteenth Amendment. Burton v.
Wilmington Parking Authority, supra; PUC D. Columbia v.
Pollak,
343 U. S.
S. Ct.
supra. an image nor confer such stage, extreme not reach such did an not even apparent was thus the state and state power Irvis, 107 v. supra. No. Moose Lodge participant. to be found argument for plaintiff’s Nor is support are they inapposite, him for cited by cases13 several of the in concert acting officials of state actions either involving under sem individual, acting private parties with a private state;s law or a agents, pretense blance or being or compels private which requires custom state-enforced present exists acts, of which elements none wrongful stated, was based authority repossess, case. The Bank’s Bank to act taken private contractual right, that was interest security personal property its protect into by contract sales entered subject the installment plaintiff. of the statutory completed certain of the sequelae
Again, of state concept are to in repossession pointed support therein, ordained for re-sale steps such as involvement 12A:9-504, J. 8. A. of mecha- supra), providing {N. an certificate a re- for the ownership nism issuance for the 39:10-15), vehicle 8. possessed procedures (N. of state forms to effect title personnel changes, use obtain and availability system of the court enforce defi- None of these factors is to the ciency judgments. relevant nature of the in the operative, would of a motor even had it been after repossessed case vehicle^ and a are judicial notice All insufficient to hearing. signifi- Moose involve the state in the seizure. cantly challenged Lodge Co., 144, 1598, 13 Adickesv. S. H.Kress & S. 398 U. 90 S. Ct. 26 Guest, ; (1970) 745, L. Ed. United States 383 U. S. 2d 142 86 S. Price, (1966) ; Ed. 1170, 16 L. Ct. United States v. 2d 383 U. S. 239 Maryland, 1152, ; 787, (1966) S. Ct. 16 L. Ed. 2d 267 Griffin 130, 1770, ; U. 84 S. Ct. 12 L. Ed. 2d S. Lombard v. Louisiana, U. S. S. (1963) ; L. Ed. 2d States, v. United Williams 341 U. 71 S. Ct. L. Ed.
177 Irvis, First Nat’l Adams v. Cal. Southern No. supra; 107 v. Bank, F. 727 Colo. v. Kirksey Theilig, Supp. (D. supra; Bank, Tower Nichols v. 1972); supra. Grove the a codifying that statute belatedly But plaintiff suggests have con- seen) we law, even it does though (as common Amendment within reach of Fourteenth “state action” stitute relaxed view) more nevertheless condemnation, may (under Constitution Jersey New offensive to constitute action the He Court. by correction the and, hence, be to amenable our 1947 Constitu- I, Article 1 of par. cites particular I, and thereof. par. Article tion14 recog of Court to enforce rights the power The Constitution, complete even in the New Jersey by nized Robinson v. clear. is absence of implementing legislation, Cahill, v. Dickey J. cert. sub nom. 62 N. den. (1973), Robinson, 292, L. Ed. 2d 976, 94 S. Ct. 414 U. S. 4, VIII, 1); N. J. par. Const. Art. (education, (1947), § Co., Inc., 189, 196 36 N. J. Printing v. Nutley Sun Cooper I, Art. N. J. Const. bargaining, (1947), (1961) (collective Inc., Bldrs., 297, N. J. Super. v. 19); Gray Serruto par. in housing, Div. discrimination (Ch. 1970) (racial as the I, 5). Const. Art. Just par. par. (1947), its en by constitutional Legislature abridge rights cannot silence, and the actments, its it cannot curtail them through in fundamental of judicial to obligation protect rights Marshall dividuals is as old this Chief Justice country. Madison, Marbury said 5 U. S. Crandh) (1 L.2 Ed. : I, par. (1947), 1 states: Art. Const. 14W. J. independent, persons and have certain and nature free All are enjoying rights, among are those of which and unalienable natural protecting acquiring, possessing, liberty, defending and life and and obtaining happiness. safety pursuing
property, and and and par. I, (1947), 7 reads: Art. 15N. Const. persons, houses, papers, people right secure their be to The seizures, effects, against shall not be and searches unreasonable and upon cause, sup- except probable violated; shall issue no warrant place describing particularly affirmation, ported oath things papers and to be seized. searched and right liberty certainly very consists in the of civil essence protection laws, every whenever he re- claim individual government injury. is afford ceives an One the first duties of protection. But see here would we nothing abridgeymiy with fundamental come into conflict thereby I, New 1 of our Constitution. Article State Jersey par. Constitution) Constitution its in our 1844 (and predecessor citi those absolute “general recognition rights Black, zen which law.” Ransom were common part *15 J. L. 446, 54 N. L. 65 N. J. 1892), Ct. (Sup. aff'd & A. in 1893). determining standard to be (E. applied The whether fundamental constitutional exists right requires the court to look to “the and reviewing Traditions [collec conscience of our whether a to people’ prin determine tive] * * * is To rooted be ranked as funda ciple as to [therе] ” Connecticut, 479, 493, mental.’ Griswold U. S. Ed. 1678, 1686, 510, S. Ct. 14 L. 2d 520 (1965) (Goldberg, J., 125 N. J. Nugent, cited in State concurring) Super. 528, 534 1973). Div. (App. in in the
Bargaining marketplace contracting ways law, morals, inoffensive or honesty prrblic policy, to and neither created nor practices recognized by tradition long law, forbidden not us by would seem to question involve of fundamental of the nor to be offensive to either rights, Jersey by sections of the New Constitution relied on plaintiff. in It must be remembered that force of contract here by the in volved there was of interest this auto duality property mobile, and that of the due process question” “[Resolution both and Federal “must Constitutions) State take (under account of only buyer not the interests the of the prop but Mitchell v. W. T. erty those seller as well.” Grant the Co., L. Ed. supra, U. S. at 94 S. at 2d at 412. buyer’s not to the holder’s option pay security to retrieve its in which
option goods way did), it (in involved no breach of but are measured in right, fundamental contractual effect private relationship parties, must inter- with which court these circumstances not it, itself, fere lest fundamental with- upon right encroach freedom to con- drawing from the their traditional parties tract. Griswold,
In dealt with invasion supra, (which Supreme privacy marriage relationship) Court of the United asserted it did States need, super-legislature wisdom, sit as a determine propriety problems, affairs, of laws that touch economic business [381 conditions. 2d social U. at 85 S. 14 L. Ed. Ct. at 513] Uo morе does this Court. The judgment the Chancery Division is affirmed. I (concurring). with agree the majority’s
Clifford, decision uphold under validity the state constitution of self-help repossession by holders I interests. also security am in accord with the declaration 12 9- S. A. A: 503 does not contravene federal due process requirements want of the requisite finding action.” But I am “state obliged to express my disagreement with those portions the rationale expressed majority which un- opinion *16 duly the stress “passivity” and of “neutrality” re- legislative enactment law, of the common I inasmuch as fear that lan- cloud guage rather than law may clarify the under which later will cases arise.
The creditor right to exercise self-help re- capture the upon collateral default in payment has underlying obligation been long recognized, with albeit legal restraint varying degrees over the centuries. See McCall, generally “The Past A Prologue: as History Right Repossess,” S. Cal. L. Rev. 58 But (1973). as the emphasize, does, Court’s opinion that codification of a which, in form, some essential was in recognized whether action past determines state constitutional magnitude is, best, exists at and, worst, disturbing ser- iously misleading. A. N. J. S. when it enacted did something
The legislature it effect, In sanc- passive. 12A:9-503. state was not their use creditors in encouraged tioned and even perhaps I understand But do not of self-help repossession. to state affirmative conduct rise giving act to be the sоrt of Reber, action Burke “State of a constitutional See & grain. An Action, Rights: Power Creditors’ Congressional L. Rev. Amendment,” 46 Cal. Fourteenth S. Essay L. Rev. 13-14 1003, 1097-1114 & 47 S. Cal. N. self- J. 12A:9-503 creditor exercise permits a valid se- in in which he possesses help retaking property commands the way interest. The statute in no curity — au- And mere creditor so to do it authorizes. simply ex necessitate com- conduct does private thorization of such law To hold that the passage “state action.” prise within the Amendment would draw the Fourteenth invokes action” im- activity expressly ambit of the term “state statute, well as conduct private covered plication — — otherwise which the slightest other fields business and affected or influenced by manner would be insignificant much need be summoned to imagination Not legislation. in such an definition expansive detect the dangers implicit restraint, not a course of action.” I favor here of “state with such necessity dangers to obviate the only reckoning in the uncertainty but also to reduce that in future cases rather I steer clear hardship. law which causes than avoids ac- of “state beyond meaning distorting recognition ” tion case, majority In this (dissenting). Pashman, holders of self-help repossession by legality upholds automobiles under retail in- purchased interests in security as consumer I cannot do goods. contracts sales stallment majority its wrong I am convinced so. both the due clause of the federal con- process conclusion that *17 — n at issue practices inapplicable ]iere stitution conclusion which concededly is supported by the well-nigh of overwhelming weight on this authority much' litigated — and, of far question1 greater importance', that it is wrong in its rejection based N. J. challenges upon Oonsl. (1947), I,Art. I par and N. A. 8. 12Á :2-302. On the first issue decisions, we are of course ultimately bound by the of the Court2, United States Supreme but on the latter issues this Court final is the arbiter and has much power advance or retard the of a development consumer market place based principles good faith and fair dealing. Today’s de- cision does not advance that ideal.
I K. J. 8. A. 12Á :9—503 states: agreed party Unless otherwise a secured has on default possession possession taking to take In collateral. a secured party may proceed judicial process without if this can be done with- peace may proceed by out breach of the or action. It is one strand in a web of statutory regulation self-help automobiles. who in the Persons engage business or retail au- making financing installment sales to?nobiles must be licensed commissioner of banking. N. J. A. 8. 17:16C-2. The terms performance of re- tail installment sales contracts are substantially regulated 8. et 17:16C-1 seq., and the has commissioner power revoke, suspend, refuse to renew the licenses sellers or financers who fail to their perform contractual ob- violate the ligations, sales, laws retail governing installment provided compilation 1Defendant has the Court with a re of 46 ported unreported dealing question. these, cases with this Of upheld self-help repossession have and 3 have overturned it. granted Employees 2Certiorari has been in Gonzalez v. Automatic Union, 415 U. S. 94 S. Ct. L. Ed. 2d 562 pendency has, course, bearing of this case no on this de Court’s present termination of the merits in the matter. *18 unworthiness, faith' or dis- bad demonstrate or “[otherwise a security The retention N. J. 8. A. 17:16C-10. honesty.” financer must be a seller or in an by interest automobile the se- or origin ownership on the noted certificate vehicles. of motor with the director and filed party cured J. 11. :10-8, 9, N. 8. A. 39 on the for themselves what actions may define parties
The A. 12A:9~ default. S. of the debtor constitute part Code, Summers, 26-2 & Commercial 501, While § Uniform to certain limita- may, subject (1972), they at 956-57 :9-502, J. A. 12A what remedies specify in N. 8. tions set out case, In in of default. this available to the creditor case are automobiles, all retail installment sales virtually as in form contract provided preprinted parties signed things, It other among seller. provided, * !r * Upon all remedies of a default holder shall have of the also party Jersey if Uniform Commercial Code it secured under the New agrees any applicable in such case is to default hereunder. Customer goods pay or, election, deliver said amount at holder’s holder, performancе may, demand for and holder without notice or any premises may found, legal process, goods where the enter peaceably custody anything possession them and found in take compensation goods (hem, payments all as for use of the retain * * possession. *. while the Customer’s are almost universal Such self-help repossession provisions See, in contracts for retail installment sales of automobiles. Annotated, e. Henson and Laws g., Davenport, Uniform contractual any pro 347-62 Even the absence (1968). however, N. J. A. 12A :9- self-help repossession, vision the creditor the to seize the on the gives goods debtor’s default. creditor, aby
When an automobile secured repossessed is with Division Motor a notice must file Vehicles de- he vehicle, from whom it was scribing naming person taken, authority his for his legal repossession. stating N. J. 8. A. 39 :10-15. The from whom the vehicle person Di- must surrender his title to the repossessed papers was vision Division may demand and the upon papers seize if fails so. The creditor he to do cannot demand the secured himself from the debtor for submission Division. papers to the Atty. 1951-53 Gen. 171 Op. conduct the secured creditor after N.
governed primarily by Where, 8. 12A:9-504. case, this dealer, the secured an creditor is assignee the secured creditor holds generally “public pursuant sale” *19 N. to J. 8. A. which the 12A:9-504(3) may the dealer be bidder; only dealer then resells the car to another retail buyer. Commеnt, “Business An as Usual: Study Empirical of Automobile Deficiency Sales in District Judgment L. Columbia,” 3 Gonn. Rev. Shuchman, 511 (1971); “Profit on Default: An Archival of Automobile Study Repossession and 8tan. Resale,” 22 L. Rev. 20 (1969). After each resale a new certificate must by be the Di ownership issued vision of Motor Vehicles. N. S. A. 39 J. :10-15. Failure to such a properly obtain certificate renders the transfer of title (thus ineffective defeating purpose repossession), Bicknell, v. 20 N. J. Velkers Glens Eggerding (1955); v. 106 Co., Falls 93 N. J. Super. 1967), Insurance 501 Div. (Ch. N. aff’d 98 J. Div. Super. certif. den. 51 (App. 1967), N. J. 388 and from ob may (1968), prevent purchaser J. a and N. certificate license taining registration plate. A.S. It of Motor 39:10-18. would the Division appear a hold and of title may hearing prevent Vehicles transfer by person wrongfully repossessed an who has automobile. N. J. S. A. 39 :10-16. New need
Repossession
Jersey
not be
performed by
public officer. N.
S. A. 12A:9-503.
It is to
expected,
be
however,
there
is considerable
between
cooperation
who
persons
frequently
engage
self-help repossession
the police, both to prevent
repossessors
from
ar
being
rested for
auto
to
the police
theft
the burden of
save
vehicles,
listing repossessed automobiles as stolen
when the
purchaser
their
reports
Boland
Essex
disappearance. See
Co.,
County Bank & Trust
F.
Supp.
Mass.
(D.
Study
Archival
Default: An
“Profit on
Shuchman,
1973);
L.
22 Sian.
Resale,” supra,
Repossession
of Automobile
de-
contends and
briefs, plaintiff
In their
Rev. 20 (1969).
thе Camden
kept
in this case
that the bank
concedes
fendant
activities.
informed of
police
repossession
under
sold
repossess goods
who seeks to
The secured party
either
contract
obliged
retail
installment sales
not
an opportunity
him
give
in advance
notify
debtor
or
not repossess.
should
why
reasons
creditor
present
by
accomplished
may
S. A. 12A:9-503.
be
Repossession
2d
54 Misc.
stealth,
Babylon,
Cherno v. Bank of
D.
29 A.
1967),
2d 114
aff'd
2d
Sup.
N.Y.S.
Ct.
(N.Y.
was in this
The is one scholar’s characterization of following self-help repossession: * * * repossess goods usually The men hired to consumer are menacing appearance in and manner. Their are often force- tactics crude, usually ful and the debtor is traumatized whole “ * * n
process. “[Rjepossession knockdown, drag-out waged is a battle phrase appears 3This have been construed courts of jurisdictions substantially vary in in this State modern times. Other Summers, their construction White & of the term. Com- Uniform. Code, hope (1972). mercial One would this § 26-6 966-71 peace” prohibit Court would construe “breach of the so as to permitted in eases abuses cited above. - Oaplovitg, Default, amply 14-1 Debtors 14r-38 4Of. impact documenting the of creditor collection on deleterious tactics well-being health and of debtors. complete disregard guile by cunning for the rules and a both sides on Seeruity Gilmore, [quoting Personal play.” Interests fair [Neth, ‘‘Repossession Property, (1965)]. Goods: Consumer 44.1 § Creditor,” 24 Case Due the What’s for the Due Consumer: Process (1972)]. W. Res. L. Rev. now largely of consumer goods repossession Self-help sales under retail installment sold limited to automobiles — Eeprisal Comment, Eepossession “No judicial contracts. n. & Comm. Rev. Eeform,” B.C. Ini. in Need of case in this pri- is thus concerned (1970). Court a time, one At marily with of automobiles. luxury a item. ear have been characterized as might properly style With a suburban life Jersey New spread transit, find decay public many persons concomitant an both their places automobile for to^ necessity, commuting Even employment for essential tem- doing shopping. porary may of the use of car have serious con- deprivation for such sequences Henningsen people. Cf. Bloomfield Inc., Motors, 32 N. J. Plaintiff bases attack on S. 12A:9-503 his variety I find necessary it to consider his grounds. only Const., claim to due under U. 8. procedural process Amend. XIY and N. Const. I, Art. I and par his conten- (1947), tion that defendant’s under N. J. conduct was unconscionable A.S. 12A :2-302.
II federal constitution de The fourteenth amendment to the * * “* clares, life, any any nor State deprive person shall * * In due of law liberty, or without property, process Shevin, 1983, 32 Fuentes v. 92 S. Ct. L. Ed. 407 U. 2d 556 held mean that a unequivocally this was (1972), under a retail installment sales purchaser consumer goods an notice and opportunity contract must provided *21 an the to use adversary prior being deprived hearing his even a secured creditor goods, temporarily, by utilizing decision are statute. Certain features of this replevin
a
the Court.
to the matter now before
special significance
a
First,
under
retail install
interest
purchaser
i.e.,
ment
pos
sales contract in the
he
purchased,
has
goods
a
interest,
session
to
subject
security
property
is
interest
86-87,
fourteenth
407 U. S. at
protected by the
amendment.
Second, even
use
temporary deprivation of the
of property
is within
84-
amendment.
U. S.
purview that
at
86,
Third,
the character of
whether
goods
question,
“necessary,” merely
luxuries,”
“mere
“important,” or even
while arguably relevant
the form
notice
to
and hearing
required,
is not relevant
due
to
or not of a
existence
process
to some
right
prior
form of
notice
hearing.
S.
89-90,
U.
at
Fourth, the fourteenth amendment requires notice aat time when hearing deprivation of can property prevented; remedies after the fact cannot undo wholly wrongful deprivation 80-82, S. property. U. at S. 1983.
Fifth, while there are undoubtedly extraordinary circum
stances in which a creditor may be
to
entitled
sold
goods
seize
under a retail installment sales contract
prevent
to
destruc
tion of the
or their
goods
or removal
from
concealment
jurisdiction,
such
unusual’;
circumstances
be “truly
must
the mere fact that the
debtor
inis
suf
default
not
secured
ficient to justify
without
taking
prior notice and hearing.
407 U.
90-93,
S. at
Finally, fact that any particular debtor from whom are seized has no defense does goods not him justify denying to be heard. The to a does opportunity right hearing on an depend advance that one is showing likely pre to vail. The possession fact is in right dispute suffices trigger U. hearing. S. Ct. 1983.
187 in Fuentes would clearly The set out require principles The notice and on the facts of case. hearing present prior are from those in parties indistinguishable interests Fuentes, and even constitutionally procedural inadequate the Florida and protections provided by Pennsylvania reple- — vin bond, statutes aof requirements posting filing pro affidavit out the fact of setting right possession forma and the of a provision post-seizure at the instance of hearing —(cid:127) the debtor are absent.
Fuentes
an
is not
aberrational case. It
is
of a
one
long
line
cases
notice and
requiring
hearing prior
depriva
Burson,
tion of
Bell v.
property
535, 542,
402 U. S.
rights.
91
1586,
S. Ct.
29 L.
90
v. Con
Ed. 2d
Wisconsin
(1971);
stantineau, 400
433, 437,
U. S.
91
507,
S. Ct.
27 L. Ed. 2d
515
v.
(1971); Goldberg Kelly,
254,
397 U. S.
90
Ct.
S.
Manzo,
1011, 25 L. Ed.
287
v.
380
(1970); Armstrong
2d
545,
U. S.
548, 551, 85
62
1187,
S. Ct.
14 L. Ed. 2d
(1965);
Co.,
Mullane v. Central
&
306,
Hanover Bank Trust
339 U. S.
313, 70
652,
S. Ct.
94
Mills
L. Ed. 865
Cotton
Opp
(1950);
Administrator,
312
85
126, 152-153,
524,
U. S.
Ct.
S.
Co.,
L. Ed. 624
United
Central R.
States
(1941);
Illinois
291 U.
457, 463,
S.
471,
S. Ct.
78 L. Ed.
(1934);
Denver,
Londoner v.
708,
373, 385-386,
210 U.
S.
The not treating two majority suggests grounds tes as case. The first the contention dispositive of this Grant, 1895, 40 v. W.T. Mitchell 416 U. S. S. Ct. L. Ed. 2d has undermined the fatally principles (1974) Fuentes. 2. It is beyond Ante at 165 n. doubt set out in Mitchell Court has limited Supreme expansive Nevertheless, Fuentes. Mitchell did not overrule scope lower majority Fuentes and the vast noted that specifically Fuentes in overturning replevin court cases following 620 n. similar decided. 416 U. S. soundly statutes at were 14; L. 1906, 40 Ed. 2d 421 n. 416 U. S. S. Ct. at at cf. L. at 94 S. Ed. 2d 423-425 (Powell, Ct. at ,5 Loui Mitchell distinguished the court J., concurring) Penn from the under attack there statute siana sequestration Fuentes on a overturned and Florida statutes sylvania property the debtor’s grounds: number of significant posses a bare allegation could not be seized on — and the facts default sion the creditor specific showing possession lien the creditor to entitling existence of vendor’s *23 se the writ of had to be in a verified petition; (2) set out a a rather than mere had to be issued questration judge . clerk; was, said, control . . “judicial it as the Court under end”; from expressly the Louisiana statute beginning (3) for a of the debtor provided at the instance speedy hearing for and award and at damages vacation of the writ torneys’ fees if vacated on the creditor tire writ was against motion; debtor’s unlike and Pennsylvania which, Florida affirmative procedures absent action debtor, no final adjudication need ever be made as to the of the creditor possession, the Louisiana statute was lite, specifically remedy pendente must inevitably followed aby on the merits hearing of the creditor’s claim.
Plainly, none of the procedural factors saved the Louisiana statute is in this case. present
The second
is that
argument
self-help repossession fails to
meet the threshold
for the
requirement
invocation of the
—
fourteenth amendment
-the
presence
“state action.” The
overwhelming majority
which,
numerous courts
since
1972, have
with the
constitutionality
dealt
self-help repos
session have found
due process
guarantees inapplicable
to self-help
this ground. E.g., Adams v.
Bank,
Southern
Nat'l.
First
In Burton v.
United
Wilmington Parking
*24
for
purposes
Court found state action
Supreme
States
far
State has so
insinu
fourteenth amendment where “[t]he
with
interdependence
private
ated itself into
position
[a
in the
joint participant
it must be
as
party]
recognized
that
* *
725, 81
Supra, 365 U. S. at
S. Ct.
challenged activity
Accord,
Price,
787,
v.
383
S.
86
at 862.
United States
U.
1152,
Mulkey,
16 L.
267
Reitman v.
S. Ct.
Ed. 2d
(1966);
369,
1627,
87
18 L. Ed.
830
387 U. S.
S. Ct.
2d
(1967);
Druker,
McQueen v.
F.
Palmer v.
1971);
438
2d 781
Cir.
(1
Co.,
F.
Columbia Gas
479
2d 153
1973).
Cir.
(6
Co.,
In Lucas v. Wisconsin Electric Power
nificant, by measured either its contribution to the effectiveness de- 190 by conflicting conduct, perhaps, its defiance of national fendant’s * * 656],
policy [466 *. F. 2d at approved by majority This formulation was in expressly Adams, 492 2d at 335. supra, F.
The role in played by self-help the State has been discussed The substantially regulates above. State use of retail by installment sales contracts dealers automobile and financers. has placed imprimatur It its the use of of N. 8. A. 12A: 9- its self-help repossession adoption 503.6 majority, “neutrality” 6The in its effort to demonstrate the 12A:9-503, pedigree H. J. 8. A. somewhat overstates the historical self-help repossession. appear prior adoption It would to the Act, 210, of the Uniform Conditional Sales L. c. which § superseded 12A:9-503, permissibility was in 1963 N. J. 8. A. self-help repossession Jersey was uncertain. The earliest New case specifically recognizing engage self-help repossession ap pears Corp. Band, to be General Electric Contracts v. 14 N. J. Misc. (Sup. 1936), although 186 684 Ct. there are a number of cases, clearly distinguish judicial earlier do which between nonjudicial seizure, might authorizing self-help read re possession, g., Berry, (Sup. 1880). Cole v. e. N. J. L. 308 early century, nonpossessory In nineteenth liens on chattels were highly Coogan, Hogan Vagts, disfavored the United States. é C., (1973). By Secured Transactions under the ü. C. n. § 1.03 century jurisdictions permitted end of the nineteenth most self- help repossession provided by contract, Annotation, where see “Right property judicial aid,” conditional seller to retake without jurisdictions (1927), split A. L. R. 184 but were on whether the self-help repossession conditional seller could use when the contract expressly provide Compare Neaves, did not for it. Blackford (permitting self-help Ariz. P. repossession) Jones, (Mass. Sup. Mass. 1870) with McLeod Jud. Ct. self-help (not permitting repossession). majority’s early English references to common law are in- apposite. financing devices, mortgage As the chattel and conditional conceptual paraphernalia nonpossessory sale with their liens and property essentially divided interests were inventions of the late *25 century. Alexrod, Security,”
nineteenth Gilmore & (1948) “Chattel 57 Yale (Earlier 517, analogues L. J. 528-529 can be identified but “queasy” Prof. them Gilmore characterizes as devices and their his- tory “obscure, doubt,” 28). id. filled with at 529 n. It is an- rights prop- to Blackstone’s achronistic read comments about the of Gardner, Co. v. N. J. 403, Singer 413-414 Cf. police its it has facilitated the re Through practices physical goods. of Most taking important, by making special pro vision cars, for transfer of title of the State has repossessed acted affirmatively to enable secured creditors achieve the to — ends of re self-help resale ultimate possessed to his compensate secured losses goods party — caused debtor’s default which would otherwise unattainable.
Ill Court, however, need not on the due rely clause process of the federal constitution to decide this case. urges Plaintiff as an alternate ground I, for decision Art. I par. of the New Jersey Constitution of 1947.
This which provision, I, verbatim reenactment of Art. I par. 1844, Constitution of has been con consistently strued to protect citizens against deprivation property without due of law. process E.g., Penn-Reading Seashore Commissioners, Lines Bd. Public Utility 114, 5 N. J. 124-126 cert. den. 340 U. (1950), 71 S. Ct. Goetschius, S. Ct. 637 Maxwell v. 40 N. J. L. (1950); Ct. 1878). It (Sup. substantially those encompasses rights protected by also the due process equal protection clauses of the federal Washington constitution. Nat'l. Ins. Review, Co. v. Bd. 1 N. J. but, as this Court (1949), erty against converting referring owners thieves bailees as to security were, yet, which devices as of uninvented. very least, adoption At the effect of the Uniform Condi- remedy validity tional Sales Act was to render certain a whose had previously give sought been uncertain to shelter to a creditor who it. use allegation legis I Furthermore. find difficult it reconcile “neutrality” majority lative made with the recent case of Singer Gardner, (1974), Co. v. 414-415 in which the particular respect paid Court laid stress on the which is to be practices Legislature by adop commercial which the has “sanctioned” provisions permitting tion C. U. C. them. *26 Cahill, 473, J. 491—493 62 N. in Robinson
recognized to limited no means by it is (1973), protection provides the Art. construing In federal constitution. provided by that the Control Bd. Milk I, State I, e.g., this may adopt, court par. of Co., 504, 1935), N. & A. Milk Eq. (E. v. Newark Cahill, construction e.g., supra, or Robinson the reject, amendment, placed the courts on the fourteenth federal to local seems conditions. appropriate fourteenth strict limitation the application to primarily amendment cases state action derives involving from a concern for the delicate balance preserving American There is an system. peril federal that everpresent an of the federal constitution will ex- overexpansive reading cessively restrict and of the power opportunity several to cope states with their own in problems their light Cases, own In Civil Rights circumstances. 109 U. S. 2d S. L. Ed. (1883), case which the United States Supreme Court first enunciated the constitu- tional doctrine the fourteenth amendment does not action, extend to purely private the Court declared: ease, present passed, law has been And until some state so through agents taken, or has or state action its officers been some sought protected rights to be adverse to the of citizens the four legislation amendment, of the United under teenth amendment, no States said proceeding any legislation, nor under such can be called activity, prohibitions against for into the amendment are state authority. course, legislation may and state Of acts under laws done provided exigency arises; advance meet the when it and should to adapted wrong and it should be to the mischief which the amend but provide is, against; laws, and was intended to state ment kind, rights of some citizen state action adverse to of the secured legislation properly by the cannot cover the amendment. Such whole rights life, appertaining liberty, property, defining and domain of providing their That would them vindication. be to establish private municipal regulative rights law of all between code man congress place society. would be make man in It take the legislatures supersede [109 them. U. at the state 23]. S. Ct. Court, in Const. (1947), This its construction Art. I, I, federalism, constrained by considerations of' par. Cahill, Robinson v. 62 N. supra, J. at and need not im- so pose rigorous requirement state action. Even were the facts in this case insufficient to of state suрport finding action for purposes clause, federal due process are they ample to establish state action for of N. J. Const. purposes *27 I, Art. I. (1947), par. Indeed, it should be noted that unlike the fourteenth “* * *
amendment, which declares: nor shall State de- any prive any person life, liberty, without property, due * * of law N. process *,” J. Const. I,Art. (1947), I par. is by its terms limited to prohibitions state action: against persons independent, 1. All are nature free and and have certain rights, among natural and enjoying unalienable which are those of and defending liberty, acquiring, possessing, and protecting life property, pursuing obtaining safety happiness. and of Other sections I of Article the Constitution of 1947 not expressly directed state action against have been held to pro tect citizens against encroachments their against rights by wholly private Co., conduct. v. Cooper Nutley Printing 36 189, N. J. 196-197 J. Const. (1961) (N. I, (1947), Art. Builders, Inc., v. par. 19); Gray Serruto 110 N. J. Super. 297, 306-307 Div. (Ch. 1970) N. J. Const. holding, (1947), (alt. I, Art. par. 5).
A number of scholarly commentators have emphasized that one of the most important functions performed by state con- bills of stitutional which rights is not performed by the fed- eral constitution protection citizens against private as well oppression as oppression state, Countryman, Role “The of Bill of in a Rights Modern State Constitu- tion,” 453, 45 Wash. L. Rev. 473 Note, (1970); “Toward an for Activist Role State Bill of 8 Ran. Rights,” Civ. Rights- Civ. Lib. L. Rev. 271 (1973), and have recognized .New Constitution Jersey presents special opportunities for Note, this construction. “Toward an Activist for Role Bill 8 Ran. Rights,” Rights-Civ. Civ. Lib. 271, L. Rev. 338 J. Const. I, Art. (1947), par. Uote, “The (N. I); 194 Non- Anti-Bias Law: Applicability Housing
New Jersey Rev. L. 567-68 13 Rutgers Developments,” Aided State I, 5). par. J. Const. Art. (1947), (1958) (N. interven Jersey have found long support
New courts with property interference private to prevent purely tion The Cameron v. I, I. in N. J. Const. Art. par. rights (1947), & 11 J. Eq. (E. 118 N. Stage Employees, atrical Local Hilton, 1918); N. 182 & A. Eq. (E. 89 J. Hilton v. 1934); A. & Hatters, 729 17, 73 N. J. L. (E. Local Brennan v. United Bednarik, J. 633 N. Misc. (Ch. v. A. 1906); Bednarik Cortese, v. Cortese grounds, overruled on other 1940), v. International J. Collins 1952); N. Div. Super. (App. 1935); Eq. (Ch. Alliance Stage Employees, Reardon, Misc. 2 N. J. Laundry Reardon Co. 1925); & A. J. Eq. (E. 97 N. 1935), 483 (Ch. aff’d Koch, Beach (Ch. 1902); 20-21 Bloom v. 63 N. J. Eq. Co., 1895). N. Eq. (Ch. & Iron Zinc Sterling I, I to private op of Art. prohibition par. application *28 by recent reaffirmation conduct has received both pressive Builders, Inc., J. Super. 110 N. courts, v. Gray lower Serruto of and praise 297, 1970) (alt. holding), 306-307 Div. (Ch. an Activist Role State Note, “Towards commentators. 371, Rev. 338 Lib. L. Rights-Civ. 8 Harv. Civ. Bill of Rights,” I, J. I viewed, 'Thus N. Const. Art. par. pro (1947), (1973). without due property tects of persons against deprivation solely is the result deprivation of law even when the process of private conduct.
It is immaterial to this whether the case inalienable rights of 1947 is the Constitution to provision construed involve a relaxed state action or no merely requirement requirement all On construction, at of state action. either en- plaintiff is titled protection deprivation to de- against property by due fendant without law. process The of “due procedural requirements .process” necessarily Co., from case v. J. Bell vary Lopez to case. N. 51 Telephone Industries, J. 362, N. 373 Avant Ltd. (1951); v. 127 Kelly, 550, J.N. 553 Div. Super. (App. 1974); v. Goldberg Kelly,
196 Ct. 25 L. Ed. 254, 262-263, U. S. S. 2d Brewer, 471, 481, v. 408 U. Ct. (1971); S. S. Morrissey 2593, 33 L. Ed. The precise requirements 2d case balance struck be any given upon type depend Morrissey tween the interests concerned. parties Brewer, & supra 2593. Restaurant S. Ct. Cafeteria 886, 895, Workers Union v. U. McElroy, 367 S. 6 L. Ed. 2d 1230 (1961).
New cases
re
have
reached the
actually
question
quirement
repos
due
in the context of
process
self-help
See,
Motors, Inc.,
e.
N.
g., Messenger
Sandy
session.
J.
Div.
Super.
(Ch.
1972).
primary
by
The
interest asserted
is the need for a speedy remedy
creditor
to prevent
destruction, concealment, reconveyance, or removal from the
jurisdiction of the
debtor.
by
defaulting
automobile
this
Against
interest must be balanced the
interest of
debtor in not
of what
an
being deprived
well be
may
essential
piece
personal
an
without
property
opportunity to show
that
the creditor
to
is
entitled
possession.
immediate
These are
precisely
interests involved in Fuentes and I
would
adopt
balance drawn
the United States Supreme
Court
that
is
ease.
debtor
to remain undis
entitled
turbed in his possession unless the creditor notifies him prior
seizing
goods
demonstrates at a suitable preseizure
likely
he is
hearing
be able to prove that he
en
is
titled
possession.
to immediate
I would permit
the secured
creditor
act ex parte only in the extraordinary
event
he can demonstrate the
danger
immediate and irreparable
Such a
damage.
procedure
expressly provided
R.
4:61,
Gardner,
recently
revised.
Co. v.
Singer
65 N.
Cf.
415 (1974).7
*29
above,
Co.,
7As indicated
Mitchell v. W. T. Grant
416 U. S.
(1974)
impair
holding
94 S. Ct.
rights provided. note, however, construing I are in the Consti adopt retrogressive tution of 1947 we not bound are to decisions of con- to attempt routinely that debtors It is not contended with when threatened automobiles ceal, of or destroy dispose a noted that sig- in the court Indeed, Messenger, repossession. cars surrender their voluntarily number of debtors nificant J. at 11. 121 N. Super, creditor. by demand where a number of cases hand, in significant On other failure make installment pay default by claims the creditor — although reason for repossession the most common ments — to assert the debtor be able may no one only means by number of cases the In some small nonfrivolous defenses. “Resort Project, See overreaching. is simply creditor from Risk Credit High Debts Collecting Process in Legal — for Alternate Allocating Los Methods Buyers Angeles in L. A. G. L. Rev. 898-901 Costs,” 14 U. Present In number practice. larger of this evidence empirical — default is the result of mistake com the claim of cases, mail, lost in etc. In error, delayed or billing payments puter cases, number of the creditor and the purchaser a substantial A. N. J. 12A fide :2-717 dispute. involved in bona are purchaser damages to deduct resulting expressly permits breach of contract from his paym from the seller’s sale A debtors studjr defaulting recent indicates ents.8 claim reason for which payments a third some about ceasing — the seller fraud or implicates principally misrepresenta 4-12, vn Debtors 6-1 Gaplovitz, Default, tion of the goods. cases, Even if in a percentage 6-70 these (1971). large insubstantial, on closer examination to be there prove defenses number pur still remain which the significant cases has bona fide which when a objections go chaser unheard See engages self-help repossession. generally, creditor Supreme would, construing the United States Court. I par. (1947), I, I, adopt principles and wise Const. Art. the sound by any imposed Fuentes unencumbered limitations have which been upon Mitchell. them deprived by negotia 8The consumer cannot of this either promissory note, seq., tion of his N. 8. et 17:16C-38.2 in the inclusion retail installment sales of a contract “waiver-of-de Owens, Unico v. fenses” cause. 50 N. J. 101
197 Neth, of “Repossession Consumer Goods: Due Process for the
Consumer: What’s Creditor,” Due 24 W. Bes. Case L. Bev. 7, 33-34 a (1972). So as there is long reasonable pros pect that some debtors will be able defenses, to make out re tail installment a buyers as are a class entitled to prereposses sion Shevin, hearing. As was aptly said in Fuentеs v. 407 87, U. 67, 1997-1998, S. 556: 1983, S. Ct. 32 L. Ed. 2d * * * right depend upon The to be heard does not an show advance ing surely prevail hearing. protests- one that will at who “To one against taking process law, property of his without due of it is say particular process no answer to his case due law would upon adequate have led to the results had same because he defense no Works, 413, 424, the merits.” Coe. v. Armour Fertilizer US 625, 629, enough pro S Ct L Ed It to invoke the 1032. safeguards significant cedural of the Fourteenth that a Amendment property stake, interest is at a whatever the ultimate outcome of hearing possession on the contractual to continued use goods. [407 U. S. 1997-1998]. S. Ct. at Motors, Inc.,
The trial iu Messenger Sandy judge Super. (Ch. Div. 1972) aud the here have majority treated such factors as the administrative convenience of creditors, the possible burden courts, on the and the effects of requiring conformity to due process standards on the cost availability consumer credit as being significance the due weighing process in this rights case. Ante at 173 n. 8. None of a these is legitimate consideration. concept is, procedural process, due its na- very
ture,
designed
prevent
virtues of administrative con-
venience,
speed
from
efficiency
under
trampling
Illinois,
rights
Stanley
citizens.
U.
656-
657, 92
S. Ct.
This Court often While to litigation. law the flood gates” in the will “open a matter of is properly our trial courts caseload in heavy type this permit refused consistently *31 have concern, we As we decision. of innovative way in the to stand argument * * “* Busch, : N. J. 559 v. in Falzone said [T]he the courts not deter an should of of litigation fear expansion cases; remedy proper the from relief meritorious granting not a decrease machinery, of judicial is an the expansion at 567. 45 N. J. the availability justice.” creditors to contention that secured requiring As the will to minimal due affect the cost process conform standards of consumer credit to detriment of the availability and reform, the short by benefited this persons sought true, it even if this were is not relevant con- answer the evaluation constitutional In this rights. sideration in however, case, may plausibly one whether the tears question for really shed the secured creditors the consumer are tears. The economic between the avail- relationship crocodile and and creditor remedies the cost ability availability Sec, Note, e. g., is extremely consumer credit “Case complex. Consumer the Elimina- Study Impаct Legislation: Period,” tion of and the Yale Cooling-Off Negotiability L. The claim that net effect of imposing minimal will process requirements repossession due be to increase cost of consumer and less credit make.it avail- to low income consumers has been substantially able chal- on theoretical economic grounds, Wallace, “The lenged Logic Reform,” L. J. Consumer Credit Yale and (1973), an early survey has least east doubt on claim matter, & Krahmer, factual Lasley, Clifford “Puentes Shevin and Consumer: and Legal Empirical Study,” L. Terns Tech. Rev. 60-61 (1972).
IY a third for decision, As I ground would hold that retail installment sales contracts automobiles sold as consumer J.N. 8. 12A:9-109(1)), the term is defined goods (as without repossession impliedly permit prior which expressly and are extent unconscionable.9 notice to that hearing law in jurisdiction of case this Despite body the growing unconscionability, principles elsewhere applying remains, necessarily law in and perhaps this area must be, doctrines. Each uneonfined well-defined unvarying of commercial the courts must be type practice presented to dealt with on and in own light peculiar its own facts of its commercial context. Motors, Inc.,
Like 32 N. J. Henningsen Bloomfield this case of standardized contracts (1960), concerns the terms by the We no- judicial offered automobile take industry. may tice of the that retail fact offered installment sales contracts by automobile dealers invariably self-help contain clauses and that no individual consumer has bargaining power force insertion of hearing notice terms into *32 those repossession The provisions. must buyer the accept terms offered in the dealer’s form contract or not the buy at goods all. Even the latter course may not him open to be if he is one of many the in New people for whom own- Jersey of an ership automobile is a practical necessity.
The fact parties that the are of grossly unequal bargaining and the power terms of the are, effect, contract dictated by the seller in his preprinted forms does grant the ju- a diciary roving commission to contracts between rewrite the clear, It parties. is however, that is this one fact which justifies judicial close of scrutiny contractual provisions. is, terms, 9N. J. S. A. 12A:2-302 its limited to transactions governed by established, Article 2 the XJ. C. It O. is well how ever, that transactions under 9 which Article incidental are sales Anderson, are also covered. (2 1970), Commercial Code ed Uniform 396; Urdang Muse, Super. § at (Essex 2-302:6 see v. 114 N. J. Cty. 1971). any case, Dist. power In the inherent of this Court permit to declare contracts apply unconscionable would us to uncon scionability Henningsen doctrines to this transaction. v. Bloomfield Motors, Inc., (1960) ; Dobbs, N. J. Johnson, Ellsworth Inc. v. (1967). 50 N. J. 553-555 Inc., Motors, Unico v. supra; v. Henningsen Bloomfield Dobbs, Ellsworth Owens, N. 111-112 J. (1967); Oil Johnson, Shell J. Inc. v. 50 N. 553-55 (1967); Marinello, Close scru 407-09 Co. v. in question term is when contractual tiny doubly justified the or contracts merchant one that the of the expands remedies Motors, Henningsen of the those consumer. Bloomfield Owens, Inc., supra Unico warranty); supra (disclaimer Marinello, supra Co. v. (uni Shell Oil defenses); (waiver Collins v. lateral termination franchise agreement); cf. Inc., liability Uniroyal, 64 N. (disclaimer &White Sum generally, See consequential damages). mers, Code, 4-6 125-28 (1972).10 Commercial at § Uniform In a Court to ask ease, such the for the proper question a Is this which a reasonable con- provision is: remedial had sumer would have bargaining power had he accepted with and the commercial to- sophistication negotiate is, say, There needless to reasonably seller even basis? a wide be range of terms which reasonable consumers might which in return for the consideration willing accept has in fact offered. This does not seller standard require offer merchant the consumer favorable pos- most terms. All sible re- principles unconscionability is that acceptability the terms within the quire range ato reasonable consumer.
Self-help without notice and repossession, prior without prior defenses to an opportunity present impartial third I party, submit, is not within that range. effect term here contract at issue put is to consumer wholly mercy creditor. The secured party may secured seize the based goods upon *33 secret unexpressed allega- of default. Thе debtor dispute tion cannot secured party’s suggested by plaintiff 10It is not in did this case not that he under repossession noted, however, stand the clause. It should be that con very commonly Gaplovit0, sumers do understand such terms. not Default, (1971). in Debtors to 10-33 10-39 suit for con consuming time by complex except claims to putting Incidental recovery goods. for version creditor, of the- mercy at continued possession his from damages deduct his effect, up in debtor, gives A. 12A:2-717 N. J. S. under payments his installment breach remedies against affirmative own limits his thereby not provision The self-help repossession seller. by the unilateral to the debtor effect on the dissimilar practical in its which this franchise agreements termination in provisions Marinello, supra. Co. v. in Oil Court condemned Shell of self-help Legislature The affirmative sanction uncon determining due weight must be given Gardner, 413-414 Co. v. scionability. Singer cre drafting process, At an in the early stage de a conscious Code made ators of the Uniform Commercial problems deal with the concededly special cision not to to all unified law applicable consumers to write single but & Secured Hogan Vagts, 1 Googan, commercial transactions. Ü.G.G., recog Transactions in the 390. They § 5.07[a] that this had harsh consequences decision particularly nized 9. In Article consumers as it affected the drafting deed, the 9-101 specifically Official Comment to U.C.C. states: prob- present special loans and consumer instalment sales Consumer inappropriate special regulation of them makes a nature whih
lems of Many regulate such general states now codification. in a commercial selling acts, acts instalment loan retail under small loans and sales security generally applies interests this Article and the like. While supersede regulatory designed goods, such is not it in consumer 9-203). (see Nor is this legislation Section 9-102 Notes to designed or retail instal- for small loan acts a substitute Article presently selling any have such which does state ment acts legislation. transactions, existence of thei to consumer As applied not, therefore, be given great need ZV.J. S. 12A:9-503 unconseionability self-help repos- weight evaluating session. *34 here is a novel one. position, suggested concededly
It has been
by a trial court in this
adopted
jurisdiction.
Pierre,
Grossman Furniture Co. v.
Super.
Nichols,
Dist. Ct.
Kosches v.
(Essex Cty.
1972);
cf.
2d 795,
Misc.
Y Since I would reverse grounds illegality exercise of self-help I repossession, would not reach the issue of the possible uneonscionability of the acceleration clause. It is of interest that after plaintiff commenced this bank, litigation, in effect, waived its exercise of the ac- celeration clause. That it could so readily do this raises ques- tions in my mind as to the justifiability the original invo- cation of Muse, the remedy. Urdang 114 N. J. Super. Cf. 372 (Essex Cty. Dist. Ct. 1971). On my view, however, that is a matter for day. another 11Carey pre-Code appears but has not been overruled and to be
good jurisdiction law. Price inis gov non-Code one but whose law erning repossession appears otherwise to resemble Article 9. See generally, Summers, White & Code, Commercial § Uniform. 26-6 at 972 n. 62
VI stand- is of use long wide practice Where commercial *35 author- judicial by the great weight and is ing supported It vigilance. us relax our is ity, temptation there is many is for the sad truth resist, must we temptation come practice garbed commercial oppressive forms of I am firmly persuaded and official respectability approval. such a just practice. self-help repossession I and remand. would reverse result. J., concurs
Clifford, Hughes For and Justices Jac- Justice affirmance —Chief Hall, Mountain, obs, and Clifford —5. Sullivan reversal and P ashman. For remandment —Justice