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State v. Cannarozzi

Decided: November 27, 1962.

STATE OF NEW JERSEY, APPELLANT,
v.
PATSY CANNAROZZI, IRVING KAYE, CLASSIC COAT CO., INC., A NEW JERSEY CORPORATION, AND CLASSIC FASHIONS, INC., A NEW JERSEY CORPORATION, DEFENDANTS-RESPONDENTS



Price, Sullivan and Herbert. The opinion of the court was delivered by Herbert, J.s.c. (temporarily assigned).

Herbert

On January 29, 1962, the Municipal Court of Hoboken dismissed eight complaints which had been filed against the defendants. Having been granted leave to appeal directly to this Division under R.R. 2:12-2, the State now argues that the magistrate's decision was erroneous and should be reversed.

Each of the complaints charged a violation of subsection (e) of section 16 of the Unemployment Compensation Law. L. 1936, c. 270, ยง 16, p. 1079, as amended; N.J.S.A. 43:21-16(e). That subsection provides for punishment by fine or imprisonment of any employer, employing unit or officer or agent of an employing unit who fails to remit to the State, when payable, contributions called for by chapter 21. For present purposes all the complaints may be considered as though identical. There were eight of them, apparently, because that many quarterly payment periods were

involved. In three of the periods the defendant Classic Fashions, Inc. filed returns or reports while in the other five the defendant Classic Coat Co., Inc. reported to the State.

No one appeared for the corporate defendants in the municipal court, although counsel did appear for the individual defendants. Pleas of not guilty were entered and there were formal waivers of indictment and trial by jury. The matter was then submitted to the magistrate upon a stipulation of facts which included statements that the defendant corporations were in business and each had employees during the periods in question, timely and correct reports were filed, the individual defendants were officers of the corporations and signed the returns, and the employers' contributions called for by the statute were not remitted to the State; also that the contributions of employees had been remitted and that no allegations of fraud were involved in the case. The tax reports filed for the eight quarterly periods were also submitted as exhibits.

The position taken and arguments made by the defendants who appeared in the lower court are indicated by the following excerpts from the magistrate's decision:

"The defendants moved for a dismissal in the first place and if denied, or in the alternative, a finding of not guilty.

Several points have been considered such as (1) criminal intent (of which there is no proof); (2) fraud (of which there is no allegation or proof); (3) just what category this offense could be in since it is not a misdemeanor or violation of the Disorderly Persons law; (4) why the State waited so long to act (since July 1, 1959); (5) did the Legislature intend such a violation to be criminal; (6) what was the Legislative intent; and (7) does this law come within the purvue of the Constitutional prohibition against imprisonment for debt."

On the stipulated facts a case was presented in which the offenses, if any, were merely a series of failures to pay employers' "contributions" that should have been paid at quarterly intervals in order to comply with the statute. The magistrate adopted the view that the unpaid contributions

were in substance debts which the State was attempting to collect, and he concluded that section 16(e) of the Unemployment Compensation Law, because of the provision for imprisonment, conflicts with the N.J. Constitution of 1947, Art. I, par. 13, which contains the mandate: "No person shall be imprisoned for debt in any action, or on any judgment founded upon contract, unless in cases of fraud; * * *." The result reached was stated at the end of the decision in these words: "All complaints against all defendants are dismissed without prejudice."

No challenge has been made to the right of the State to take this appeal; in fact no one has appeared for the defendants and no brief has been filed for them. The State's brief and oral argument by implication have assumed that ...


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