Pacific Discount Co. v. Powell

• Citation: 175 A.2d 212,70 N.J.Super. 156
• Decision Date: 30 October 1961
• Docket Number: No. A--679,A--679
• Parties: PACIFIC DISCOUNT CO., Inc., a New Jersey corporation, Plaintiff-Appellant, v. Aaron POWELL, Defendant-Respondent.
• Court: New Jersey Superior Court – Appellate Division

Page 156

70 N.J.Super. 156

175 A.2d 212

PACIFIC DISCOUNT CO., Inc., a New Jersey corporation, Plaintiff-Appellant, v. Aaron POWELL, Defendant-Respondent.

No. A--679.

Superior Court of New Jersey

Appellate Division.

Argued Oct. 16, 1961.

Decided Oct. 30, 1961.

Russell H. Hulsizer, Roselle, for plaintiff-appellant (Sollie Wolfman, Newark, attorney; Russell H. Hulsizer, Roselle, of counsel).

No appearance for defendant-respondent.

Before Judges CONFORD, FREUND and LARBRECQUE.

The opinion of the court was delivered by

FREUND, J.A.D.

Plaintiff appeals from a deficiency judgment entered after the foreclosure of its conditional sales agreement securing the accompanying promissory note.

On May 15, 1959 defendant purchased a used Oldsmobile from Lincoln Auto Sales (Lincoln). He executed and delivered to Lincoln a conditional sales contract and a promissory note providing for payment of the balance of $2,230.50 in 30 monthly installments. The agreement was assigned to Pacific Discount Co., Inc., and the note negotiated to them as a holder in due course. Powell defaulted when he had completed about one-half the payments. The car was seized and sold at public sale to plaintiff's president for $785, who then transferred it to Lincoln for the amount of his purchase price. After subtracting the payments already made, the amount recovered from the sale of the car and a refund of unearned insurance premiums, and adding 15% Attorney's collection fee, plaintiff claimed a deficiency of $471.87. A suit on the note for that amount was instituted in the Essex County District Court.

After taking testimony, a default judgment was entered in favor of plaintiff, but allowed in the amount of only $79.18 to which was added an attorney's fee of $11.89. The trial judge concluded that defendant was entitled to a finance charge rebate of $316.05, being one half of the total finance charge entering into the purchase price. The judge acknowledged there was no applicable statute authorizing this deduction, but made findings and conclusions reflecting a view that the rebate should be allowed as a matter of public policy. Plaintiff contends on this appeal that it was not required to give a rebate in case of a default by the purchaser.

The Uniform Conditional Sales Law, R.S. 46:32--28, N.J.S.A., provides that if the proceeds of a resale are insufficient to defray the allowable expenses and the balance due upon the purchase price, the seller may recover the deficiency from the buyer in an action at law. Bergen Auto Company v. Mattarochio, 58 N.J.Super. 161, 164, 155 A.2d 787 (App.Div.1959). There is no requirement of a finance charge credit against the deficiency. Nor does any other section of the Uniform Conditional Sales Law (R.S. 46:32--1 et seq., N.J.S.A.), the old Retail Installment Sales Act (N.J.S.A. 17:16B--1 et seq.), or the new Retail Installment Sales Act of 1960, L.1960, c. 40, § 1 et seq. (N.J.S.A. 17:16C--1 et seq.), provide for such rebate. In fact, there is some legislative intent to the contrary. The 1960 Retail Installment Sales Act and its predecessor both provide that a retail buyer may satisfy in full, at any time before maturity, the balance due under an installment contract and thereby become entitled to receive a proportionate refund credit on the 'time price differential.' N.J.S.A. 17:16C--43; N.J.S.A. 17:16B--7. Had the Legislature intended to require the seller to allow a credit in cases of default, as it does with prepayment, it would have so provided. The absence of such provision is a persuasive indication that the Legislature intended to limit the right to refund of finance charges to the case of prepayment. It is elementary that the intent of ...