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Jenkins v. Kaplan

Decided: May 26, 1958.

GLORY JENKINS, PLAINTIFF-APPELLANT,
v.
YETTA KAPLAN, DEFENDANT-RESPONDENT



Goldmann, Freund and Conford. The opinion of the court was delivered by Conford, J.A.D.

Conford

[50 NJSuper Page 275] The questions presented by this appeal concern the availability of the remedy of restitution to the plaintiff tenant of rents paid to the defendant landlord in excess of the lawful maximum under federal, state and local rent control legislation, on the theory of unjust enrichment.

On October 23, 1957 plaintiff instituted the present action in the Hudson County Court. The complaint alleged that plaintiff had been a tenant of a dwelling house in Union City owned by defendant from February 1, 1952 through August 1957, during which period defendant "demanded, accepted and received" from plaintiff a total of $985 in excess of the lawful maximums, by reason of which defendant has been "unjustly enriched" in that amount.

The complaint particularly recited that from February 1952 through July 1953 the apartment was subject to control under the Federal Rent Control Act of 1947, as amended (61 U.S. Stat. 193, 50 U.S.C.A. Appendix , § 1881 et seq.) and the maximum rent thereunder was $45 per month, but the defendant exacted $52.50 per month, aggregating $127.50 in excess rentals; that from August 1953 through June 1956 the apartment was subject to the New Jersey Rent Control Act of 1953 (L. 1953, c. 216, as amended by L. 1956, c. 76, N.J.S.A. 2 A:42-14 et seq.) and from July 1956 to August 1957 subject to the municipal rent control ordinance of Union City, passed pursuant to the permissive state act of 1956 (L. 1956, c. 146, N.J.S.A. 2 A:42-56 et seq.), and the maximum rent thereunder continued to be $45 per month, but defendant exacted, from August 1953 to August 1957, $62 per month, aggregating $857.50 in excess rentals. The complaint was drawn in one count.

Before filing an answer defendant moved to dismiss the suit on the grounds that, inter alia , (1) the claim for the period through July 31, 1953 (under the federal act) was barred by the time limitation in 50 U.S.C.A. Appendix , § 1895 (§ 205 of the National Housing Act of 1947); (2) the part of the claim covered by state law was barred by the limitations in N.J.S. 2 A:14-10(b) (the two-year limitations statute governing actions at law generally for recovery of a forfeiture under penal statutes) and in N.J.S.A. 2 A:42-38, as amended by L. 1956, c. 76; (3) the action is "in violation of" N.J.S. 2 A:6-34, which limits the civil jurisdiction of the county district court except in

certain tort cases to suits involving $1,000 or less; and (4) the court was without jurisdiction to hear the cause as the action for restitution was "equitable" and therefore "cognizable in the Chancery Division." In connection with the latter ground, the notice of motion prayed that the court render "such relief" as it may deem "equitable and just."

The County Court granted defendant's motion and dismissed with prejudice plaintiff's claim for overcharges under the federal law and the State Rent Control Act of 1953, holding that the remedy given the tenant under those two acts was exclusive, and, the limitation periods therein provided having expired, plaintiff could not recover the excess rents exacted. As to the rents collected in excess of the maximum allowed under the municipal ordinance pursuant to the 1956 state act, the court held that since the legislation failed to provide the tenant with any statutory remedy, the restitutional relief sought was not precluded by statute, but since recovery for the excess rents exacted from July 1956 to August 1957 would be less than $1,000 the court thought suit "should be instituted in the county district court." It consequently dismissed this portion of the plaintiff's claim, but without prejudice. A subsequent application by the plaintiff to the court to have that part of his claim transferred to the district court rather than dismissed without prejudice was denied, the court being of the mind that the failure of the complaint to isolate that claim in a separate count would only lead to confusion in the district court were the suit transferred. This was despite plaintiff's offer to amend the original complaint.

Plaintiff appeals from the order dismissing her complaint and also from the order denying her application to amend the order of dismissal so as to provide for the transfer of plaintiff's action for overcharges after July 1, 1956 to the district court. Pending the appeal, plaintiff instituted an independent action in the district court for such overcharges. Defendant has moved to dismiss that action, and disposition of that motion is presently pending, presumably awaiting the outcome of this appeal.

I.

We deal first with the County Court's dismissal with prejudice of that part of plaintiff's claim for the period during which the federal act was applicable.

Plaintiff argues that inasmuch as the present suit is not for treble damages under § 205 of the Housing Act of 1947, as amended (50 U.S.C.A. Appendix , § 1895(a)), but for simple restitution, the suit is governed by the general six-year limitation statute applicable to suits on "implied contracts," N.J.S. 2 A:14-1, rather than the one-year limitation provided in § 205 of the federal act (50 U.S.C.A. Appendix , § 1895(c)). The contention must be rejected, as we agree with the trial court that Ash v. Mestice , 25 N.J. Super. 463 (App. Div. 1953), compels a contrary conclusion. This court there rejected the tenant's claim for recovery on the theory of unjust enrichment of rents in excess of the maximum under the Housing Act of 1947 where recovery would be precluded under the one-year limitation in the federal act, the court stating that the "remedy [provided by the federal act] is exclusive and subject to the limitations contained in the act" (25 N.J. Super. at page 465). See also McKean v. Hillman , 2 N.J. Super. 131 (App. Div. 1949), where the court held the tenant not entitled to any common-law right of recovery for charges in excess of the lawful maximum fixed by the Price Control Act of 1942 (50 U.S.C.A. Appendix , § 901 et seq.) (predecessor to the National Housing Act of 1947), stating ...


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