Woodcliff Management v. North Bergen Tp.

• Decision Date: 23 January 1974
• Citation: 316 A.2d 494,127 N.J.Super. 123
• Parties: WOODCLIFF MANAGEMENT, Plaintiff, v. TOWNSHIP OF NORTH BERGEN, a Municipal Corporation, et al., Defendants. INDEPENDENCE ASSOCIATES, Plaintiff, v. TOWNSHIP OF NORTH BERGEN, a Municipal Corporation, et al., Defendants.
• Court: New Jersey Superior Court

Page 123

127 N.J.Super. 123

316 A.2d 494

WOODCLIFF MANAGEMENT, Plaintiff, v. TOWNSHIP OF NORTH BERGEN, a Municipal Corporation, et al.,

Defendants.

INDEPENDENCE ASSOCIATES, Plaintiff, v. TOWNSHIP OF NORTH BERGEN, a Municipal Corporation, et al., Defendants.

Superior Court of New Jersey,

Law Division.

Jan. 23, 1974.

Harvey M. Douglen, Roselle Park, for plaintiffs (Stier & Douglen, Roselle Park, attorneys).

Leon S. Wolk, Asst. Tp. Atty., Fort Lee, for defendants.

LARNER, A.J.S.C.

These consolidated actions attack the validity of a number of the provisions of the Rent Stabilization Ordinance adopted by the Township of North Bergen. Ordinance 1577--71, December 16, 1971, as amended by Ordinance 1663--73, June 21, 1973. The cases were heard in a summary manner on the return date of an order to show cause pursuant to a stipulation that a housing emergency existed in the township and that the issues for determination by the court were purely legal in nature and limited to the validity of the particular ordinance provisions under attack.

The pattern of the ordinance is substantially similar to that of the Rent Stabilization Ordinance of the City of Jersey City which was considered by this court in Albigese v. Jersey City, 127 N.J.Super. 101 (1974), 316 A.2d 483. The determination of the comparable issues in Albigese are incorporated herein and adopted as the conclusions of the court controlling the parties to this litigation.

Nevertheless, plaintiffs herein advance an additional facet of constitutional infirmity which requires exploration and decision by the court. They attack the validity of § 5 of the ordinance:

Any rent increase imposed after January 11, 1973, the date of the expiration of Federal price controls, to the extent that such increase is in excess of that which is permitted by this Ordinance is hereby declared to be null and void and Such excess rent shall be refunded to the tenant by the landlord forthwith. (Emphasis supplied)

Plaintiffs, pursuant to leases with tenants, collected rents between January 11 and June 22, 1973 which were in excess of that allowed by the June amendment. The validity of the retroactive efect of the ordinance on contracts entered into between the rollback date of January 11 and the effective date of the ordinance has been sustained by the court in Albigese as a reasonable exercise of police power. The narrow issue remaining for determination therefore is whether the municipality may compel a landlord to refund the excess rentals paid by tenants before the effective date of the ordinance.

It is urged by plaintiffs that the right to retain the moneys already collected is a vested property right which is protected by federal and state constitutional limitations, and cannot be divested under the threat of prosecution for violation of the ordinance with potential penalties of fine and imprisonment.

It cannot be denied that the possession of moneys acquired through a consummated transaction has a vested characteristic which is distinguishable from a contract right that is only executory in nature. The latter right may be impaired by legislation which is reasonably necessary for the protection of the public within the ambit of police power reserved to the legislature. A vested property right, on the other hand, is protected by the Fourteenth Amendment of the United States Constitution which prohibits the state from depriving any person of property without due process of law. See also N.J.Const. (1947) Art. I, par. 1. If the right is one which is clearly vested, it cannot be divested by a legislative enactment, albeit that enactment may otherwise constitute a valid exercise of police power. State v. Standard Oil Co., 5 N.J. 281, 293, 74 A.2d 565 (1950), aff'd 341 U.S. 428, 71 S.Ct. 822, 95 L.Ed. 1078 (1950); McAllister v. Board of Education, Kearny, 79 N.J.Super. 249, 261, 191 A.2d 212 (App.Div.1963), aff'd 42 N.J. 56, 198 A.2d 765 (1964). See Memphis v. United States, ...