Jacobs, Eastwood and Bigelow. The opinion of the court was delivered by Jacobs, S.j.a.d.
The defendant Wheeler Auto Driving School, Inc., appeals from the action of the Director of the Division of Motor Vehicles, denying its application for a license to conduct a commercial driving school.
In July, 1951, the defendant corporation filed an application under chapter 216 of the Laws of 1951 (R.S. 39:12-1 et seq.) for a license to conduct a drivers' school and hearing thereon was held before the Division of Motor Vehicles. The application was signed by Harold W. Wheeler as president and contained a statement that no officer of the applicant
corporation had ever been convicted of a crime. This statement was false since Mr. Wheeler had been convicted on three occasions, including a conviction in 1930 for petit larceny and two convictions in 1937 for the issuance of worthless or fraudulent checks. The Director denied the application because the president of the applicant corporation had been convicted of a crime and the application contained a materially false statement. See R.S. 39:12-3. The defendant, in support of its appeal from this action, contends that chapter 216 is unconstitutional and that the Director abused his discretion in refusing to issue the license.
Prior to the enactment of chapter 216 drivers' schools had been conducted within the State without regulation and had been accompanied by fairly well known abusive practices. In the language of the respondent,
"these practices took the form of promising to secure New Jersey drivers' licenses for persons who were obviously, either by physical or mental defects, incapable of complying with the regulations; insinuations that New Jersey drivers' licenses could be secured only after instruction in one or the other of the then existing schools; and the practice of continuing to give and charge for driving instructions which were not necessary to the person being instructed."
It has been suggested that there were additional abuses which on occasion resulted in the issuance of licenses to wholly unqualified drivers. In 1932 the State of New York dealt with the problem by enacting a law requiring that drivers' schools be licensed and in 1949 its law was strengthened by conferring greater authority upon the Commissioner of Motor Vehicles and imposing higher standards upon operators of drivers' schools. See L. 1949, c. 649, Vol. 62- A McKinney's Consol. Laws N.Y., c. 71, Vehicle and Traffic Law , § 7. Governor Dewey's memorandum accompanying his approval of this enactment said:
"The need for this legislation has arisen from present public necessity. Only recently there was an extensive investigation conducted by the State Attorney General and the Commissioner of Motor Vehicles into the operation of drivers' schools which exposed
improper practices in connection with the obtaining of licenses for new drivers. This bill will help prevent a recurrence of the conditions exposed in that investigation."
In 1951 the New Jersey Legislature enacted chapter 216 which was, in part, modeled upon the New York statute and requires that drivers' schools and their instructors be licensed. Paragraph 3 thereof provides generally that the Director of Motor Vehicles may deny an application for license if, in his discretion, he determines that the applicant (a) has made a material false statement, (b) held an earlier license which was suspended or revoked, (c) has been or has an officer who has been convicted of a crime, (d) has failed to furnish satisfactory evidence of good character, reputation and fitness, (e) does not have a place of business as required by the act, (f) is not the true owner of the drivers' school, or (g) did not furnish the required liability insurance policy. Paragraph 4 provides that the Director may make such rules as he deems reasonable for the conduct of drivers' schools, and formal rules have been promulgated pursuant thereto. However, the denial of the appellant's application was not rested upon any rule violation. It was based upon the admitted circumstances that an officer of the corporate applicant had been convicted of crime and its application had falsely asserted the contrary; under the terms of paragraph 3 these circumstances furnished direct authority for the Director's exercise of discretion in denying the application. See McBride v. Clark , 2 N.J. Misc. 814, 816 (Sup. Ct. 1924), affirmed 101 N.J.L. 213, 223 (E. & A. 1925); Gross v. N.J. State Board of Optometrists , 11 ...