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Wagner v. Mayor

Decided: June 10, 1957.

GEORGE J. WAGNER AND PROPERTY OWNERS PROTECTIVE ASSOCIATION, A CORPORATION OF NEW JERSEY, PLAINTIFFS-APPELLANTS,
v.
THE MAYOR AND THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, DEFENDANTS-RESPONDENTS



On certification from the Appellate Division on the Court's own motion.

For reversal -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld and Burling. For affirmance -- None. The opinion of the court was delivered by Vanderbilt, C.J.

Vanderbilt

The plaintiffs brought this action to enjoin the enforcement of an ordinance adopted by the City of Newark controlling rents and for a judgment declaring the ordinance invalid and unconstitutional. On their motion for summary judgment in the Law Division of the Superior Court the ordinance was upheld and judgment granted in favor of the defendants, 42 N.J. Super. 193 (Law Div. 1956). The plaintiffs appealed to the Appellate Division and, because of the public importance of the matter and the obvious conflict between the decision of the trial court in this case and that of the trial court in Grofo Realty Co. v. City of Bayonne, 24 N.J. 482, we certified both matters on our own motion.

When ten years of federal rent controls brought on by wartime conditions expired on July 31, 1953, a serious public emergency still existed in certain areas of this State due to a continued shortage of rental housing space. The Legislature then deemed it essential to the health, safety and general welfare of all the people of the State that rent controls continue to be operative upon the expiration of federal law in those areas where conditions demanded it. In this state of affairs it passed the State Rent Control Act of 1953, L. 1953, c. 216, N.J.S. 2 A:42-14 et seq., and made its operation dependent upon the decision of the local governing bodies of each municipality. As originally provided, such

controls were to be effective until December 31, 1954, but this date was extended by amendment to midnight June 30, 1956, by L. 1954, c. 260, sec. 12, N.J.S. 2 A:42-51. As that date drew near it became obvious that further extension of the general act by the Legislature could not reasonably be expected. In the light of these circumstances, the governing bodies of 35 municipalities, including the City of Newark, believing that an emergency in rental housing still existed in their particular areas and that a termination of controls there would precipitate chaotic conditions that would adversely affect the health, safety and welfare of their inhabitants, petitioned the Legislature for the passage of special laws under the authority of Article IV, Section VII, paragraph 10 of the Constitution of 1947 and N.J.S.A. 1:6-10 for authority to adopt local ordinances to provide for rent controls in their particular localities.

Before final action was taken on the petitions by the Legislature, the City of Newark, on June 21, 1956, adopted its own rent control ordinance, to become effective simultaneously with the expiration of state rent controls on June 30, 1956. The general object of this ordinance was to continue in force in the City of Newark the controls provided by the expiring state law. The preamble to the ordinance states that it was adopted "pursuant to the police powers of the City of Newark." Specifically, the ordinance established a Housing Rent Control Commission with power to promulgate rules and regulations and to carry out the objectives of the ordinance; it prohibited rental charges in excess of the lawful rents on June 30, 1956; it prohibited evictions so long as a tenant paid the rent to which the ordinance declares the landlord is entitled, and made provision for the regulation of evictions and dispossessions through the issuance of certificates of eviction by the rent commission. The ordinance made violators subject to a fine not exceeding $500 and made no mention of any termination date.

Thereafter, the Legislature enacted L. 1956, c. 146, N.J.S. 2 A:42-56 to 2 A:42-73, entitled:

"An Act authorizing certain municipalities to adopt, make, amend, repeal and enforce ordinances to provide for the regulation of rentals and the possession of housing space, with respect to certain properties, and to make necessary appropriations; providing for county rent control review boards in certain cases, imposing certain duties upon the State Rent Control Director, conferring jurisdiction on the county district courts, in certain cases, and providing for the operation of the act in said municipalities when adopted by ordinances of the governing bodies of said municipalities."

This act became effective July 31, 1956 and was made retroactive to midnight June 30, 1956, N.J.S. 2 A:42-71. The preamble to the act acknowledges the petitions of the municipalities and recites that:

"The Legislature deems it to be for the best interests of the people to pass 1 special law concerning this subject instead of a large number of special laws pursuant to said petitions in order to secure reasonable uniformity and to insure certain restrictions and limitations which shall be applicable to all said ordinances when adopted by the respective governing bodies of said municipalities; * * *." (Emphasis supplied)

By this law the 35 municipalities, including Newark, that had petitioned the Legislature prior to the passage of the act, were permitted to adopt ordinances for the purpose of regulating rent control within their borders in a manner similar to that provided on a statewide basis by the prior rent control act, L. 1953, c. 216, supra, as amended and supplemented, and by the rules and regulations of the State Rent Control Director as were in effect and operation in the particular municipality on June 30, 1956, N.J.S. 2 A:42-56 and 57. The law, however, gave rent increases to landlords of 15% in some cases and of 20% in others, N.J.S. 2 A:42-66. It limited the effect and operation of any local ordinance adopted under the authority of the act to a date not later than December 31, 1957, the termination date of the act itself, and in conformity with the constitutional provision under which this action was taken, Article IV, Section VII, paragraph 10, supra, it provides that it

"* * * shall be inoperative in any municipality until it shall be adopted by ordinance of the governing body of such municipality * * *."

Chapter 146 has not been adopted by the City of Newark and therefore has not become operative in that municipality.

The plaintiffs on this appeal argue that the Newark ordinance was superseded by the state special law, L. 1956, c. 146, supra, and that this statute precludes the exercise by the City of Newark of any power to adopt a rent ordinance or to continue the enforcement of any such ordinance in existence at the time of the adoption of the state statute. They urge that the ordinance is void because it substantially conflicts with the terms and provisions of the state law. They also contend that the ordinance is invalid because it runs counter to the provisions of other state statutes of general applicability, i.e., N.J.S. 2 A:42-5, 6 and 7, relating to the liability of a holdover tenant for double rent and the right of a landlord under certain circumstances to institute an action for possession without formal demand or reentry; N.J.S. 2 A:18-53, 60 and 61, regarding summary proceedings in the district court; and N.J.S. 2 A:35-1 and 2, dealing with actions for possession of real property brought in the Superior Court. Continuing in this vein, the plaintiffs further assert invalidity because of the conflict of the ordinance with the general public policy of the State with regard to emergency rent controls. Moreover, the plaintiffs contend that the Newark ordinance interferes with the constitutional rights of property owners and violates the principles of due process and equal protection and impairs the obligation of contracts in existence at the time the ordinance was adopted. They argue, further, that the control of rents and evictions is not within the police power delegated to municipalities; that the city had no power to declare that an emergency existed in housing, because the Legislature in refusing to extend the Rent Control Act of 1953 declared as a matter "of fact and law" that the emergency no longer existed; and that even the existence of an emergency in fact within the City of Newark did not give the city any greater power than it otherwise had, because an emergency does not create a remedial power but merely furnishes the occasion for its exercise. Finally,

the plaintiffs argue that the functions attempted to be vested in the municipal officials by the ordinance amount to an improper and unconstitutional redelegation of the original legislative powers delegated by ...


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