Jones v. Haridor Realty Corp.

Citation37 N.J. 384,181 A.2d 481
Decision Date21 May 1962
Docket NumberNo. A--100,A--100
PartiesErmon K. JONES, Claimant-Respondent, v. The HARIDOR REALTY CORP. t/a Asbury Gables, Harold Strauss, Arthur C. Samuels, Isadore Strauss, Respondents-Appellants.
CourtUnited States State Supreme Court (New Jersey)

Arthur J. Sills, Atty. Gen., for respondent Division on Civil Rights, Dept. of Education (Elias Abelson, Deputy Atty. Gen., of counsel and on the brief).

Charles L. Morgan, West Long Branch, for respondents-appellants.

The opinion of the court was delivered by


The Commissioner of Education issued an order against the appellants, The Haridor Realty Corp., trading as Asbury Gables, Harold Strauss, Isadore Strauss and Arthur C. Samuels, for the purpose of remedying a violation by them of the Law Against Discrimination, N.J.S.A. 18:25--1 et seq. Appellants appealed to the Superior Court, Appellate Division, but before argument there the cause was certified by this court on our own motion.

Certain objections have been interposed to the procedural course pursued by appellants in seeking review in the Appellate Division. Compare, R.R. 4:88--8(a) and N.J.S.A. 18:25--21. In view of the public importance of the substantive questions involved, we have concluded to pass the objections in order to reach a decision on the merits.


The Haridor Realty Corp., trading as Asbury Gables, is a New York corporation registered to do business in New Jersey. At and prior to the incident which produced these proceedings, it was engaged in building one-family homes in a housing development in an area known as Asbury Gables, Monmouth County, New Jersey. The specific section of its operation appears on a land subdivision map entitled 'Map of Asbury Gables West, Township of Neptune, Monmouth County, New Jersey,' which was filed in the County Clerk's Office on October 3, 1957, after having been approved by the Township Committee. All or substantially all of the land covered by the map was acquired initially in the names of Harold Strauss and Isadore Strauss by deed dated November 22, 1957. During the period with which we are concerned, Harold Strauss was secretary and treasurer of Haridor and in active charge of management of the development; Isadore Strauss was the president. There is no doubt they controlled the corporation.

The entire site had Federal Housing Administration approval for home construction purposes. Haridor stipulated that it was subject to the Law Against Discrimination because it sold dwellings to buyers who financed their purchases through mortgage loans guaranteed by that Federal agency. Such use of public credit by both seller and purchaser draws the development into the category of publicly assisted housing accommodations. N.J.S.A. 18:25--4; Levitt & Sons, Inc. v. Div. Against Discrimination, etc., 31 N.J. 514, 158 A.2d 177 (1960), appeal dismissed 363 U.S. 418, 80 S.Ct. 1257, 4 L.Ed.2d 1515 (1960).

Haridor's method of operation was this: Three different types of model homes were built on the tract for inspection by prospective purchasers. The types were advertised for sale in the public press as representing houses available in Asbury Gables, a community 'being developed by Isadore and Harold Strauss.' And the public was told that purchases could be made with FHA mortgages. A sales office was maintained in one of the model homes where the appellant, Arthur C. Samuels, a real estate broker, acted as sales agent of Haridor. At this office the purchaser would select the type model home that appealed to him; then with Samuels' assistance he would select a location for it from the available building lots shown on the map of the development. This proceeding would be followed by the execution of the necessary papers to complete the transaction, including the FHA mortgage application (if that kind of mortgage was desired). Haridor would erect the dwelling. If the lot chosen by the purchaser was not already owned by Haridor, title was obtained from Harold and Isadore Strauss, its secretary-treasurer and president, who as individuals were the record owners of the tract. The proof shows clearly an arrangement between the individuals and their corporation whereby title to the lots would be conveyed to Haridor as they were needed to complete sales transactions with home buyers.

In June, August and October 1959, Ermon K. Jones visited the Asbury Gables development. On two occasions he was accompanied by his wife, Blanche, and one of their minor daughters. Jones talked with Samuels about the purchase of a home there, selected the type of home he liked, and requested and obtained an FHA mortgage application. The form was completed and sent to Haridor with the request for a meeting to complete the formal contract of sale. The evidence reveals beyond doubt that Jones' offer was refused because he is a Negro. It stands undenied that Harold Strauss said to an investigator of the Division on Civil Rights 'No law or no one is going to force me to sell to a Negro a house in this development. * * * Now, if this man wants a house, let him find a plot and I'll build it for him. Before I will sell to a Negro in this development, I will close up the development.'

There is no doubt of the ability of Mr. and Mrs. Jones to meet the financial obligations involved in the purchase and maintenance of the property, he being an engineer employed at Fort Monmouth, and she a teacher in the public school system in Neptune Township.

Following the refusal to sell to Jones, a complaint was filed with the Division on Civil Rights, charging violation of section 4 of the Law Against Discrimination. The section says:

'All persons shall have the opportunity to obtain * * * all the * * * advantages, facilities, and privileges of * * * publicly assisted housing accommodation, and other real property without discrimination because of race, creed, color, national origin or ancestry, subject only to conditions and limitations applicable alike to all persons. This opportunity is recognized as and declared to be a civil right.' N.J.S.A. 18:25--4.

Hearing was held thereon and the charge of discrimination was sustained. An order was then issued by the Commissioner of Education directing Haridor to enter into a contract with Jones to sell him a house and building lot upon the terms available to all other purchasers. The order provided also that if Jones selects a lot in the development, title to which is in Harold Strauss and Isadore Strauss, they shall convey it to Haridor so that the transaction can be completed. And it directs that if, for any reason, Haridor is unable to comply with its terms, the parcel chosen by Jones in the development shall be offered for sale to him by Isadore Strauss and Harold Strauss.

On this appeal appellants attack the constitutionality of the Law Against Discrimination. In addition, Harold Strauss and Isadore Strauss assert that the Commissioner of Education has no jurisdiction over them as individuals to support the order directing them to transfer title to a lot or lots to Haridor, or directly to Jones, if necessary, to consummate the sale.

In Levitt it was held that the enactment under attack here did not transgress the equal protection clauses of the State and Federal Constitutions. Publicly assisted housing, as there broadly defined, constitutes a large segment of the housing market. When Congress entered the housing field, its purpose was 'a decent home and a suitable living environment for every American family.' (Housing Act of 1949, 42 U.S.C.A. § 1441) In pursuit of that objective, it undertook to stimulate home building and buying by making available to those who wished to take advantage of the program, a mortgage payment guaranty, the like of which was not to be had in private business. Developers and owners who availed themselves of the assistance obtained an added advantage in the housing market which they would not otherwise enjoy. See 'Minority Housing,' 46 Cornell L.Q. 194, 236 (1961); Report, United States Commission on Civil Rights, Housing, 58--60 (1961). They were aided by the public credit which in the ultimate depends upon revenues of government having their source in all of the people, non-Whites as well as Whites. Such a group is sufficiently large and possessed of sufficiently similar characteristics distinguishing it from other developers and builders, and it has a sufficiently peculiar intimacy with State and Federal governmental policy of providing housing without discrimination, to justify classification by the Legislature for separate treatment. Moreover, a ban on discrimination in publicly assisted housing can be more easily enforced than such a ban on wholly private housing, since involvement of a public agency in the sale and mortgage transaction creates a greater opportunity for supervision and control of the prohibited practice. In the sense indicated, publicly assisted housing provides a reasonable basis for differentiation from housing generally. The fact that a more expansive classification might more fully achieve the desired objective, does not cause the legislative mandate to run counter to the Constitutions of the State and Federal sovereignties. Absence of mathematical nicety or exact equality does not offend where there is some reasonable ground for the separate treatment. The wide scope of state police power will support such treatment so long as it cannot be said to be arbitrary. Levitt, supra, 31 N.J. at pp. 532, 533, 158 A.2d 177; Burks, Jr. v. Poppy Construction Company, 20 Cal.Rptr. 609, 370 P.2d 313 (Sup.Ct.Mar. 26, 1962); Zehil v. Weaver, 15 Misc.2d 436, 182 N.Y.S.2d 111 (Sup.Ct.1958).

Primarily, however, appellants' assertion of invalidity rests in the claim that the Law Against Discrimination deprives them of property rights without due process of law in violation of the Fourteenth Amendment of the United States Constitution. That question was not raised in Levitt and...

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