Zuest v. Ingra. Same

• Decision Date: 31 January 1946
• Docket Number: Nos. 15, 16.,s. 15, 16.
• Citation: 45 A.2d 810,134 N.J.L. 15
• Parties: ZUEST et al. v. INGRA. SAME v. FARINA et al.
• Court: New Jersey Supreme Court

134 N.J.L. 15

45 A.2d 810

ZUEST et al.

v.INGRA.

SAME

v.FARINA et al.

Nos. 15, 16.

Court of Errors and Appeals of New Jersey.

Jan. 31, 1946.

Appeal from Supreme Court.

Separate actions by Edward Zuest and Lillian Zuest, respectively, against John Ingra and against Sebastian Farina, and others to recover penalties under the Emergency Price Control Act for alleged overcharges in rent. From judgments of the Supreme Court, 132 N.J.L. 37, 38 A.2d 457, and 38 A.2d 458, reversing judgments for plaintiffs, plaintiffs appeal.

Affirmed.

Abraham M. Herman, of Orange, for appellants.

Louis Zemel, of Newark (Louis J. Miller, of Newark, on the brief), for respondents.

Chester Bowles, of Washington, D. C., and John D. Masterson, of New York City (David Weinstein, of New York City, of counsel), for Administrator of Office of Price Administration.

BROGAN, Chief Justice.

This appeal is from a judgement of the Supreme Court which reversed two judgments recovered by the plaintiffs against their landlords in the Orange District Court of Essex County. The plaintiffs were tenants first of the defendant, Ingra, and later of the defendants, Sebastian and Antoinetta Farina. They sued the respective owners because of alleged violation by the latter of the Federal Emergency Price Control Act, § 205 (e), 50 U.S.C.A. Appendix § 925 (e). The plaintiffs paid a $30 rent each month for an apartment when the amount for rent fixed by the Office of Price Administration for the accommodation was $27. The Federal statute, supra, permits the tenant, in these circumstances, to maintain an action for treble the amount of the overcharge or, in the alternative, the sum of $50 for each violation, ‘which ever is the greater.’ The District Court judge found for the plaintiffs. The Supreme Court reversed, holding that there was no direct evidence that the person who received the rent from the plaintiffs, in this instance a rent collector, was the agent of the owner, and further that, the action being for a penalty, the general rule of respondeat superior in civil cases has no application but that direct authority should be shown which was not the case here. See Zuest v. Ingra, 132 N.J.L. 37, 38 A.2d 457.

An affirmance of this judgment might well be rested, without more, on the fact that there was a complete want of evidence to connect the rent collectors, Thomas Farina and Sam Farina, whith the first owner of the property, John Ingra, or with Sebastian Farina, or Antoinetta, his wife, to whom Ingra sold the house. Nothing whatever was supplied in the proof in the case to show the relationship of Thomas Farina to any of the defendants in either case. There is a like void so far as Sam Farina is concerned.

The question on appeal being identical in each case, the two appeals are consolidated. John Ingra et ux. took title to the property in which plaintiffs were tenants on Jan. 25, 1943. They conveyed to Sebastian Farina and his wife, Antoinetta, on April 15, 1943. In the suit against the latter Thomas Farina is named as a defendant. As to Thomas the court found ‘a verdict of no cause for action.’ That removed him from the case and consequently from this appeal. But to return to the main question: there having been, as indicated above, not a shred of evidence that the defendants in these two cases, as landlords, had fixed rent in any amount or had received rent from anybody, or had engaged an agent to collect it, that might well end the matter. But what was said in the Supreme Court opinion, supra, namely, that the instant cases were actions for penalties, is at odds with other cases out of the Supreme Court, starting with Beasley v. Gottlieb, 131 N.J.L. 117, 35 A.2d 49, in which it was held that suits of this character are not penal in essence but rather a private suit for a private wrong, and therefore cognizable by the District Courts in this state. Our statute concerning the jurisdiction of a District Court, R.S. 2:8-40, N.J.S.A., provides: ‘Every action of a civil nature at law, or to recover any penalty imposed or authorized by any law of this state, where the debt, balance, penalty, damage or other matter in dispute does not exceed, exclusive of costs, the sum or value of five hundred dollars, shall be cognizable in the district courts of this state.’ (Italics supplied.)

Now the statute under which this suit is brought is not our statute but one that was passed by the Congress of the United States in 1942. Cf. 50 U.S. C.A.Appendix § 925(e). We find ourselves unable to agree with the reasoning of the opinion of the Beasley case, supra. Rather we read the language of this Federal statute and regard the nature of its provisions as a delineation of an action for the recovery of a penalty and not as a compensating action, in the sense of making the injured party whole. To ascertain the purpose of a statute we must consider the nature and essence of its provisions to give its aim and object controlling effect. Compare Helwig v. United States, 188 U.S. 605, 610, 613, 23 S.Ct. 427, 47 L.Ed. 614; People of State of New York v. Jersawit, 263 U.S. 493, 44 S.Ct. 167, 68 L.Ed. 405; United States v. Childs, 266 U.S. 304, 305, 45 S.Ct. 110, 69 L.Ed. 299.

A penalty, generally speaking, in the matter of money, is a sum paid or required to be paid by way of punishment for violation of law. If the Federal statute, supra, was intended to be compensatory to the injured party, it is plain that the plaintiffs' damage would only be the rather small sum involved in the overcharge plus costs and legal fees, for which latter items the statute, supra, also permits recovery. A judgment which included the initial loss and expenses would be complete compensation. Here the judgments amounted to $250 plus a counsel fee of $100 or $50 for each case, a total of $350 for an overcharge of $3 per month for five months. That there is no relationship between the amount permitted to be recovered, under the statute, supra, and the sum in which the plaintiffs were injured is patent. This feature alone seems to negative the claim that the recovery was compensatory in character. But there is another feature in this Price Control Act indicative of its nature. The Federal statute, supra, provides that in the event the individual suffering the injury fails to institute an action, under this section of the statute, the Federal Price Administrator may institute such action in behalf of the United States within a year from the date of the occurrence of the violation; and, further, that if the action be instituted by the Administrator the injured party shall thereafter be barred from bringing an action for the same violation. This, the plainest implication, outlines a penalty, not damages as such, because certainly the Price Administrator has suffered no damage because a landlord charges some individual an excessive rent. ‘Penalty’ is defined in 25 C.J. § 72, under Fines, Forfeitures, etc., thus: ‘A penalty is a sum of money of which the law exacts payment by way of punishment for the doing of some act that is prohibited or omitting to do some act that is required to be done.’ See also 36 C.J.S., Fines, § 1. The test of a penal law seems to be: Is the wrong sought to be redressed a wrong to the public or to the individual? Huntington v. Attrill, 146 U.S. 657, 668, 13 S.Ct. 224, 36 L.Ed. 1123. To overcharge or profiteer in the face of an Act of the Congress forbidding it, during a time of national peril, is assuredly a public wrong. True it is done against...