Singer Co. v. Gardner

Decision Date27 October 1972
PartiesThe SINGER COMPANY, a New Jersey Corporation, Plaintiff, v. Larry K. GARDNER, Defendant.
CourtNew Jersey District Court

Dimon, Haines & Bunting, Mount Holly (William R. Wood, Mount Holly, appearing), for plaintiff.

Farr, Brandt, Haughey & Penberthy, Haddonfield (David A. Kasen, Haddonfield, appearing), for defendant.

WOOD, A.C., J.C.C.

This is an action in replevin in which plaintiff The Singer Company seeks judgment for possession of certain articles of merchandise sold to defendant, and by way of damages, the balance of the purchase price of said articles allegedly remaining due and unpaid. Defendant denies any indebtedness to plaintiff. He contends that the agreement between him and plaintiff be declared void as unconscionable and by reason of the exaction of wrongful charges by plaintiff in violation of the Retail Instalment Sales Act, N.J.S.A. 17:16C--1 et seq. By way of counterclaim defendant demands damages for the alleged wrongful seizure by plaintiff of the goods in question.

On January 15, 1969 defendant purchased from plaintiff a sewing machine for the agreed purchase price of $400. He paid $65 down on account of the purchase price with the balance to be paid in instalments. A sales slip was prepared setting forth the sale, the price (plus sales tax of $12), the down-payment, the balance of $347 remaining due, and showing the 'agreed monthly payment' as $14.

On January 21, 1969 defendant signed a 'Singer Credit Application' setting forth on the face thereof personal data usually called for on such applications. On the reverse of said application form there appears in reasonable legible type an agreement headed 'The Singer One to Thirty-six Credit Plan Agreement.' This agreement sets forth the terms of instalment payments made on this so-called 'credit plan.'

On or about February 8, 1969 defendant purchased a Singer U--43 vacuum cleaner for the sum of $70. The sales slip covering the transaction indicates a payment of $2.10 on account (the amount of the sales tax), a balance due of $70 and agreed monthly payments of $15.

On May 21, 1969 defendant purchased two more vacuum cleaners, a U--43 model for $69.95 and a C--10 model for $79.95, a total purchase price of $149.90. This sales slip showed payment of $4.50 (the amount of the sales tax), the balance of $149.90, and no amount of agreed monthly payments.

Defendant made monthly payments on account of these purchases until July 1969. Thereafter payments were made sporadically until April 24, 1971, when a payment of $100 was made, bringing the amount paid on account to a total of $469. No payments on account were made thereafter. Certain attempts at collection by representatives of plaintiff having been unsuccessful, this action in replevin was instituted by the filing of the complaint on July 13, 1971. A writ of replevin was issued and there were seized thereunder the sewing machine and two vacuum cleaners. No notice of the repossession was given to defendant.

The sewing machine was resold by the plaintiff on April 4, 1972 for $172.95. One U--43 vacuum cleaner was resold on May 27, 1972 for $7.99. No notice was given to defendant of the resales and it is to be noted that such sales were prior to the entry of any judgment in this action. There is no evidence as to whether the resale prices represented the then fair market value of the goods sold. In any event, defendant was credited with the sum of $180.94 realized from the repossession sales. Plaintiff has thus credited defendant with payments totalling $469.60 and proceeds of resales in the sum of $180.94, making total credits of $650.64. The other vacuum cleaner seized under the writ of replevin has not been sold and nothing is credited to defendant by reason of its repossession.

It is to be noted that while the complaint alleges sale of two vacuum cleaners to defendant, the evidence and testimony disclose the sale of three vacuum cleaners, one February 8, 1969 and two on May 21, 1969. Defendant testified that he paid cash in full for the vacuum cleaner purchased in February. The records produced by plaintiff indicate no such payment. Defendant says he was given a receipt for the purchase. He did not produce such receipt, saying he gave it to his mother in Philadelphia for whom he bought the machine. I conclude that the sale in question was not a cash sale as contended by defendant. Defendant claims that he made certain payments with which he was not credited. I find that such payments are not established and I conclude that the charges and credits as stated by plaintiff must be accepted as correct.

Plaintiff's claim against defendant, then, is summarized as follows:

                             TOTAL CHARGES
                Purchases                         $619.60
                Sales taxes                         18.60
                Service charges                    228.87
                  (time-price differential)
                Credit life insurance                3.27  $870.64
                             TOTAL CREDITS
                Payments                          $469.60
                Proceeds from repossession sales   180.94   650.54
                                                  -------  -------
                      TOTAL DUE                            $220.10

Defendant contends that the transactions were retail instalment sales, and fall within the provisions of the Retail Instalment Sales Act, N.J.S.A. 17:16C--1 et seq. He contends that defendant violated the provisions of the act in that:

(1) The contract failed to set forth the particulars required by N.J.S.A. 17:16C--27.

(2) The effective interest, or time-price differential, amounts to an annual rate of 18%, although such interest or time-price differential is limited by the act to 10%, N.J.S.A. 17:16C--41.

(3) Particulars as to separate items were not set forth in additional statements annexed to the contract, as required by N.J.S.A. 17:16C--28.

(4) Defendant was not informed as to allocation of payments or balances due on individual items, as required by N.J.S.A. 17:16C--29.

Defendant therefore urges that the contract be held unconscionable and void, and thus unenforceable under N.J.S. 12A:2--302.

Plaintiff concedes that the provisions of the Retail Instalment Sales Act, including the limitation of 10% On the time-price differential, have not been complied with. It contends, however, that these transactions are not retail instalment sales but are 'retail charge account' sales, and do not come within the provisions of the act. The principal issue in this case is whether the transactions are retail instalment sales subject to the provisions of N.J.S.A. 17:16C--1 et seq.

Defendant also contends that the seizure of the goods by plaintiff under the writ of replevin was wrongful since it was made without notice or an opportunity by defendant to be heard, and that the replevin statute is unconstitutional. Cf. Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972).

Instalment and conditional sales contracts, providing for the payment of an amount in excess of the purchase price for the privilege of paying such price in instalments (commonly referred to as a 'credit service charge' or 'time-price differential') have long been recognized as distinct from loans and thus to be exempt from the limitations of the usury statute, N.J.S.A. 31:1--1 et seq., the rationale of this distinction being that they are not contracts for the 'hire of money,' wherefor the usury statute does apply. That such distinction may leave consumers and purchasers of goods on credit in a position highly vulnerable to excessive charges has been increasingly recognized, and, since 1948, the Legislature has addressed itself to the problem of retail credit buying, Steffenauer v. Mytelka & Rose, Inc., 87 N.J.Super. 506, 210 A.2d 88 (Ch.Div.1965). In 1960 it adopted the Retail Instalment Sales Act, N.J.S.A. 17:16C--1 to 60, for the purpose of protecting consumers from abuses by retail sellers respecting charges for making instalment purchases. By N.J.S.A. 17:16C--1(b), a 'retail instalment contract' is defined as follows:

'Retail installment contract' means any contract entered into in this State between a retail seller and a retail buyer evidencing an agreement to pay the retail purchase price of goods, or any part thereof, in 2 or more installments over a period of time, and pursuant to which title to or a lien upon the goods is retained or taken by the retail seller for the payment of the retail buyer's obligation.

The act sets forth, among other things, detailed requirements as to the information to be included in retail installment sale contracts, including the cash price, the down payment, the cash balance, the amount of the official fees, the principal balance, the time price differential, the time balance, the number of instalments and the amount and due date of each instalment. It further provides that the time-price differential shall not, for goods other than automobiles, exceed the rate of $10% Per year.

By N.J.S.A. 17:16C--29 the act provides that where subsequent purchases are added to the original agreement, payments thereafter shall be considered as allocated among all purchases; and before repossessing any goods for default the seller must actually allocate...

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2 cases
  • Singer Co. v. Gardner
    • United States
    • New Jersey Supreme Court
    • July 30, 1974
    ...of the action, the contentions of the parties, and the basic facts are set forth in the opinion of the district court, 121 N.J.Super. 261, 262--266, 296 A.2d 562 (1972), as This is an action in replevin in which plaintiff The Singer Company seeks judgment for possession of certain articles ......
  • Gibbins v. Kosuga
    • United States
    • New Jersey Superior Court
    • November 2, 1972

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