State v. Graziani, A--168

CourtNew Jersey Superior Court – Appellate Division
Citation60 N.J.Super. 1,158 A.2d 375
Docket NumberNo. A--168,A--168
PartiesSTATE of New Jersey, Plaintiff-Respondent, v. Ernest GRAZIANI et al., Defendants-Appellants.
Decision Date29 June 1959

John E. Toolan, Perth Amboy, argued the cause for appellants Ernest Graziani, James Graziani, Halsey Packard, Inc., and Halsey Automobile Co. (Toolan, Haney & Romond, Perth Amboy, attorneys).

Charles Stanziale, Newark, argued the cause for appellants Joseph Morese, Dominick Canace and Angelo Aquilino.

George R. Sommer, Newark, argued the cause for appellants Henry Rellah, Michael Moore and Joseph Marcelli (Joseph Schoenholz, Newark, attorney).

Myron W. Kronisch, Legal Asst. to Prosecutor of Essex County, Newark, argued the cause for respondent (Charles V. Webb, Jr., Essex County Prosecutor, Newark, attorney; Myron W. Kronisch, of counsel and on the brief).


The opinion of the court was delivered by


Eight individual and two corporate defendants appeal from a judgment of conviction entered against them in the Superior Court, Law Division, Essex County, after a jury verdict. The charge in the indictment was that between about September 1, 1955 and March 14, 1957 they unlawfully conspired to obtain money by false pretenses 'from members of the general public, particularly purchasers and prospective purchasers of motor vehicles' by falsely representing to some customers that certain motor vehicles were 'leftover new cars' when in fact they were used cars, contrary to the provisions of N.J.S. 2A:98--1, N.J.S.A. and N.J.S. 2A:98--2, N.J.S.A.

The corporate defendants are Halsey Packard, Inc., and Halsey Automobile Co. The former, which began business in February 1955, is a franchised Packard automobile dealer, and also sells new and used cars of other manufacture at its showroom in a large two-story building on Central Avenue in the City of Newark. During the period mentioned in the indictment, this corporation employed between 10 and 20 salesmen. The Halsey Automobile Co. went into business about October 1956 as an unfranchised dealer of new and used cars of various makes, operating from a lot on Springfield Avenue in Newark, a considerable distance from the Halsey Packard, Inc., location.

The defendant Ernest Graziani is president and owner of all the shares of stock of both corporations except for one share in each. He testified that his functions were to 'do the advertising * * * set the policy * * * (and) the financing.' His brother, the defendant James Graziani, held one share of qualifying stock in each corporation, and was secretary and a member of the board of directors of both corporations. He was a salaried employee of Halsey Packard, Inc., and the processing and preparation of automobiles for sale were under his direction and supervision. Neither Ernest Graziani nor James Graziani was a salesman of automobiles.

Included as defendants were the sales manager, Joseph Morese, and the salesmen: Harry Rellah, Michael Moore, Joseph Marcelli, Dominick Canace and Angelo Aquilino.

In the indictment, 21 were charged with the conspiracy. The trial of ten of the defendants was severed on the State's motion. One defendant, Anthony D'Urso, was acquitted by the court at the end of the case.

The theory of the State's case was that the conspiracy was established by the defendants' joint efforts on three levels: Viz., false advertisements in newspapers and over radio and television of 'leftover' new automobiles for sale; the acquisition of second-hand or used cars and the rehabilitation of them to look like new automobiles; and the sales of such used cars by the sales staff who falsely and knowingly represented them to be new automobiles. The advertising was under the direction of Ernest Graziani, and the rehabilitation of used cars was under James Graziani's supervision.

We shall deal with each of these three essential stages separately.



It was stipulated 'that the word 'leftover' as used in the advertisements of Halsey Packard, Inc., referred to new cars.'

The proofs established that in the 18-month period covered by the indictment the defendant Halsey Packard, Inc., spent over $300,000 for broadcasts and for the printing of over 900 full-page advertisements in two Newark newspapers and in a chain of ten weekly newspapers distributed in Bergen County. Of the many exhibits in the record, the following are typical of frequently published

advertisements in bold type: 'Buy Your New Car From A

Reliable New Car Dealer Halsey Packard Inc.'

advertising '55 Chevrolets and '55 Oldsmobiles. (Newark Star-Ledger, Sunday, September 18, 1955.) An advertisement of January 27, 1956 read:

'The Last of the Leftovers'

offering '55 Fords, Chevrolets and Plymouths, and again 'Buy Your New Car From A Reliable New Car Dealer!' Another advertisement of November 11, 1956 offered 'Leftovers--

'56 Fords Chevs Plyms.'

followed by the admonition that the purchase be made 'from a reliable new car dealer.' Some advertisements carried the words 'Factory Equipped' beneath 'Leftover.'

The defendants also advertised over television and radio stations. The cost of telecasts was shared by Packard (the manufacturer), and in these about one-half the time was devoted to Packard cars and the other half to defendants' leftovers. Radio scripts carried the same message that leftover (new) cars were offered for sale and urged that 'a reliable new car dealer' be patronized.

Both Ernest Graziani and James Graziani knew that the word 'leftover' in advertisements conveyed and was intended to convey to the public the idea that the cars were new.


Reconditioning of Used Cars

James Graziani supervised the purchasing of used cars. He directed the cleaning up of the vehicles, which, beside removal of dents, spraying and replacement of slipcovers, included steam cleaning of the motor. Speedometers were turned back to zero. Ernest was familiar with the practice of the turning-back of speedometers and the steam cleaning of motors under James' direction.



Thirteen separate fraudulent sales by the above-named salesmen to persons (in many walks of life) responding to the advertisements were proved. Eleven of these sales were made for Halsey Packard, Inc., and two for Halsey Automobile Co.

The defendant Henry Rellah made three of these sales: to Stewart M. Clippinger, Frank Williams and Dorothy Schrauth. Defendant Michael Moore sold four cars: to Peters Hughes, Andrea Frascino, Ite Hamming and John Klaymeier. Defendant Joseph Marcelli sold four automobiles: to Frank Ferrigno, Harry Jahoda, Stanley Kasmerek and Gilbert Delgado. Defendants Dominick Canace and Angelo Aquilino participated in the sale of one car to Gladys Gargalowitz and Canace sold another to Lillian Brown. Defendant Joseph Morese, the sales manager, was shown to have assisted the salesmen in several of the sales.

It was stipulated that '(e)ach of the cars involved in the transactions, testified to by the State's witnesses, were used cars, and the particular salesman who made the sale knew at the time he made the sale that the car was used.'

Each of the above-named purchasers testified concerning his or her purchase and, while the transactions were not identical, the pattern was the same. They testified about their attraction to the defendants' premises by the advertisements; they came to buy new cars; each purchased upon the representation and under the belief that the car was a new automobile, but later ascertained through some defect in the vehicle that it was in fact a used automobile. The car sold to Williams had been involved in an accident. In the Clippinger, Williams and Brown transactions, standard new car forms of sale were used. In the Clippinger order, however, a 'discount' was allowed; in the Williams order, Rellah described the car as 'Demo,' meaning demonstrator; and in the Brown sale, the word 'used' appeared as 'U Sed.' In the other transactions, a used car order form was given to the purchaser. When interrogated about this, the salesmen and, in some instances, Morese, the sales manager, assured the buyer that the car was new but, because the defendant Halsey Packard, Inc., was an authorized Packard dealer, they could use only the used car form in connection with the sale of a car of another make. Mrs. Klaymeier, for example, testified as follows:

'I told Mr. Moore I wanted the car canceled because it was a used car. And he told me they used this blank because they are an authorized Packard dealer and in order to sell other type cars besides Packards they used this used car order form, but that it was a new car.'

There was testimony that salesmen adopted a selling technique, referred to as 'switch-sell or bait,' which diverted the interest of a prospective purchaser from a new automobile on the floor of the salesroom to one which appeared new and was represented to be new but which was in fact a used car.

Both Ernest and James Graziani participated in the adjustment of claims of some of the 13 above-named buyers; and, in the Williams case, Ernest soon recognized that this car had been involved in an accident. This was one of the cars which at the time of sale had been represented as a new car by the salesman Rellah. However, none of the salesmen was ever discharged.

The defendants on their case denied a conspiracy. They offered evidence that Halsey Packard, Inc. was an authorized Packard automobile dealer and sold other new and used cars; that during the period stated in the indictment it sold 4,332 automobiles, of which 55 were new Packards, 488 new cars of various other makes and 3,790 used cars. Defendant Halsey Automobile Co. sold new and used cars of various makes and, in the period of about six months from October 1956 to March 14, 1957, sold a total of 494 cars, of which 33 were new and 461 were used cars.

Defendants insisted that...

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