On certified appeal to the Appellate Division of the Superior Court.
For affirmance -- Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For reversal -- Chief Justice Vanderbilt. The opinion of the court was delivered by Heher, J.
The basic issue here is the constitutional sufficiency of the State Rent Control Act of 1953, c. 216, N.J.S. 2 A:42-14 et seq., entitled "An Act providing for the regulation of rents and possession of housing space, with respect to certain properties in certain municipalities, making an appropriation and repealing" the Rent Control Act of 1950, c. 234.
The act of 1953 has a preamble reciting that (1) "A serious public emergency exists in certain areas of this State due to continued shortage of rental housing space"; (2) "Rent control is essential to the health, safety and general welfare of the people of this State"; and (3) "Federal rent control is presently due to expire" on July 31, 1953, "and the enactment of an adequate State rent control law, to become operative upon the termination of Federal rent control, is imperative." The act expires by its own limitation on December 31, 1954.
The immediate controversy concerns the relation between the plaintiff landlord and the defendant tenant Harner arising by contract made between them March 1, 1952 for a tenancy from month to month of the first-floor southwest suite in an apartment house No. 74 Lenox Avenue, in East
Orange, New Jersey, in plaintiff's ownership, then subject to federal rent control under the Emergency Price Control Act of 1942, 50 App. U.S.C.A., sec. 901 et seq., and the Housing and Rent Act of 1947, as amended, 50 App. U.S.C.A., sec. 1881 et seq., which expired by its own limitation in the particular area at midnight July 31, 1953. Under federal control, the permissible maximum rent was $60 per month until August 29, 1951, when it was increased to $72 per month by an order made September 4, 1951 by the Federal Area Rent Director pursuant to the power conferred by the cited federal statutes, and this order was still effective at the close of July 31, 1953. There has been no change in the maximum rent thus prescribed, either by the federal authority during its incumbency or by the state authority since it assumed rent control under the cited state act on August 1, 1953, and there has been no application for a modification of the fixed maximum, either by the plaintiff landlord or the defendant tenant. Notwithstanding the maximum of $72 per month permissible after September 4, 1951, the contract between the parties established the rent at $65 per month; and rent at this rate was paid until August 1, 1953, when the plaintiff landlord served upon the defendant tenant notice either to pay rent at the rate of $72 per month commencing September 1, 1953, or vacate the premises as of that date, and the result was a new agreement between the parties, after action for possession brought in the Essex County District Court, fixing the monthly rental at $72, and discontinuance of the suit for possession.
Entertaining doubt as to the validity of the new rent charge, and having in view the violation forfeiture provided by section 25 of the State Rent Control Act of 1953, N.J.S. 2 A:42-38, the landlord brought a civil action under the Uniform Declaratory Judgments Act, N.J.S. 2 A:16-50 et seq., in the Essex County District Court naming the tenant and the Essex County Rent Control Board as defendants, for a declaration of his rights, status and legal relations under the tenancy, and in particular that the maximum monthly rental for the premises was "fixed" at $72
by the cited State Rent Control Act, and the agreement for the payment of rent at that rate was an enforceable obligation. By leave of court, the complaint was later amended to include the charge that, in the particulars to be adverted to, the state act constitutes an infringement of the State Constitution of 1947 and serves to deprive plaintiff of his property in disregard of section 1 of the Fourteenth Amendment to the Federal Constitution, and to demand, in the alternative, if the act be held valid, a declaration that section 19 of the state act, N.J.S. 2 A:42-32, "fixes the lawful base rental for any housing space in existence at the close of July 31, 1953, at the maximum amount of rent lawfully payable therefor as of the close of July 31, 1953, under any orders, applicable to such housing space, then in effect by authority of the" Federal Housing and Rent Act of 1947, as amended, and thus, by force of the state act, "the present lawful rent" for the premises "is the maximum rent of $72 per month which was established" by the federal authority on September 4, 1951, and the particular tenancy agreement embodies the elements of an enforceable contract.
The Attorney-General moved for leave to intervene under R.R. 4:37-2, deeming it to be litigation involving the "interpretation and validity" of a "State regulation" under the State Rent Control Act; and the motion was granted.
Plaintiffs moved for summary judgment on the assumption that section 19 of the state act fixed the "lawful base rental" for the subject housing space at the "maximum amount of rental lawfully payable therefor" as of July 31, 1953 under the federal regulation, and so as a matter of law the rental agreement under review is legally sufficient. The Attorney-General moved for a dismissal of the complaint on the contrary hypothesis, and also on the additional ground that the "validity of the rules and regulations" of the State Director of Rent Control is the subject matter of the litigation and under R.R. 4:88-10 the review of an "administrative rule" of a state administrative agency can be had only by petition for a declaratory judgment addressed to the Appellate Division of the Superior Court.
Plaintiff's motion for summary judgment was denied, and the Attorney-General's motion to dismiss was granted, the findings state for want of jurisdiction. It was considered the "better practice," citing Legg v. County of Passaic, 122 N.J.L. 100 (Sup. Ct. 1939), for "the inferior court to assume an act is constitutional until it is passed upon by the appellate court, unless it is so clearly in contravention that there can be no doubt about it"; and the "rules and regulations defining the method of determining lawful base rentals" were held reviewable only by the Appellate Division of the Superior Court under R.R. 4:88-10.
Plaintiff's appeal to the Appellate Division from the consequent judgment of dismissal is here for decision by certification on our own motion.
Leave was given by the Appellate Division to Property Owners' Protective Association and James E. Bryan and Alice S. Bryan, as amici curiae, to brief and orally argue the issue of the constitutionality of the state act of 1953. Counsel treats the constitutional issue raised by the second count of the complaint as "an unadulterated question of law which must be determined and in which there is no factual dispute."
The plaintiff landlord seeks a determination of the "amount, if any, to which his lawful rent is restricted by the State rent control law"; and he urges that this inquiry involves "questions of construction and validity arising from the statute," such as are within the jurisdictional clause of the Declaratory Judgments Act, N.J.S. 2 A:16-53, in terms inclusive of questions of this class. As just indicated, section 19 of the State Rent Control Act, N.J.S. 2 A:42-32, equates the "lawful base rental" for the particular housing accommodations with the "lawful" rent "payable" for such space as of July 31, 1953, and directs that in the determination of the "amount of such base rentals, the orders, if any, then in effect under any federal rent control shall be taken
into consideration." The regulations promulgated under the authority granted by section 7 of the state act, N.J.S. 2 A:42-20, defines "lawful base rent" or "lawful rent" as the "rent actually and legally charged, received, payable or due" for the given housing space "for the rental period ending on July 31, 1953, or the last period immediately prior thereto."
The contention is that the rent "payable" within the intendment of section 19 of the state act is the ceiling or maximum rent permissible under the federal regulations on July 31, 1953; and this is plainly a question of "construction and validity" arising under the state statute, cognizable under the express terms of section 53 of the Declaratory Judgments Act, a remedial measure designed, N.J.S. 2 A:16-51, "to settle and afford relief from uncertainty and insecurity with respect to rights, status and other legal relations." Compare McCrory Stores Corporation v. S.M. Braunstein, Inc., 102 N.J.L. 590 (E. & A. 1926); New Jersey Bankers Ass'n. v. Van Riper, 1 N.J. 193 (1948); New Jersey Turnpike Authority v. Parsons, 3 N.J. 235 (1949); Blackman v. Iles, 4 N.J. 82 (1950); Abelson's, Inc. v. New Jersey State Board of Optometrists, 5 N.J. 412 (1950).
And the county district courts are "courts of record" thus empowered by section 2 A:16-52. Although a court of limited rather than general jurisdiction, the county district court is nevertheless a court of record, for it proceeds in the main according to the course of the common law; it is not a special tribunal; it has power to determine its own jurisdiction, and the record of its proceedings and the judgment import absolute verity, and every intendment is made in favor of its judgments. These are the essential attributes of courts of record. Hess v. Cole, 23 N.J.L. 116 (Sup. Ct. 1851); McPherson v. Cunliff, 11 Serg. & R. 422 (Pa. Sup. Ct. 1824); Fox v. Hoyt, 12 Conn. 491 (Sup. Ct. Err. 1838); In re Dean, 83 Me. 489, 22 A. 385, 13 L.R.A. 229 (Sup. Jud. Ct. 1891); Van Norman v. Gordon, 172 Mass. 576, 53 N.E.
267, 44 L.R.A. 840 (Sup. Jud. Ct. 1899); State v. Allen, 117 Ohio St. 470, 159 N.E. 591 (Sup. Ct. 1927); Commonwealth ex rel. Margiotti v. Sutton, 327 Pa. 337, 193 A. 250 (Sup. Ct. 1937). And the county district courts are "courts of record" by force of the creative statute itself. N.J.S. 2 A:6-7.
The circumstances here -- the treble forfeiture, the continuing penalty, and the public interest in adherence to the policy -- all make a strong case for the exercise of judicial discretion for a prompt adjudication of the issue.
The Attorney-General suggests that the administrative regulation adverted to may be tested only by a proceeding in the Appellate Division under R.R. 4:88-10, and within the time limited by R.R. 4:88-15. But the validity of the regulation of necessity turns upon the sense and significance of the statute; and, recognizing this, the Attorney-General does not object to a consideration of the administrative rule "in conjunction" with the questions concerning the meaning of the particular statutory provision and the constitutional integrity of the Act, and concedes there is a "justiciable controversy under the facts of the case."