Plaintiff sues on a contract for the establishment of a retail installment sales account.
Defendant Janet P. Walsh entered plaintiff's North Brunswick store on June 13, 1967, for the purpose of purchasing sneakers for her two small boys, who accompanied her. While approaching the checkout counter, where she paid cash for her purchase, she was accosted by a saleslady, who inquired whether she desired to open a charge account. Mrs. Walsh declined, but the saleslady persisted, pleading that she would be awarded points in a contest. Mrs. Walsh finally capitulated and was taken to Joan Scott in the credit department. Mr. Walsh's name and address were written by Mrs. Scott on a form entitled "retail installment sales contract, GRANT'S CHARGE-IT PLAN", together with payment terms for an account of $200.00, plus interest for two years, carrying charges and insurance, all to be amortized at $10.00 per month, beginning one month from date. Clause L represented that Mrs. Walsh's husband had authorized her to sign and that both accepted liability for the purchase of family necessaries. Mrs. Walsh signed and was given a book of coupons of various denominations totaling $200.00, good for purchases in any of plaintiff's stores, all numbered and stamped "Void if detached". Mrs. Walsh testified that the entire transaction took five to seven minutes, during which she was distracted by her children; that Mrs. Scott did not explain the details of the plan; that Mrs. Scott told her that the coupons worked basically the same as a charge plate, and that she would be charged as they were used. Mrs. Scott testified that she told Mrs. Walsh: "You only pay for what you buy out of the coupon book", and asked her: "Will $10.00 a month be all right?" Mrs. Walsh understood this to mean the monthly payment after making purchases.
That evening Mrs. Walsh's small son ripped some coupons from the book, and she destroyed them all in the belief that they were now void, and that, in any event, they were meaningless unless used. Mrs. Walsh failed to make the first
payment on the account, and suit was instituted against her and Mr. Walsh.
Plaintiff's credit manager testified that redeemed coupons were never checked or centrally cleared, but simply destroyed monthly. He also indicated that plaintiff had other credit plans, and that Mrs. Walsh personally qualified for a regular charge plate account. Subsequently, prior to trial, Mr. Walsh disavowed in writing by certified mail his wife's authority to bind him.
Defendant contends that Mr. Walsh was not bound by Mrs. Walsh's signature and that there was failure of consideration, fraud, and usury in the transaction.
Paragraph L of the contract signed by Mrs. Walsh states: "Buyer, if over 21 and married, represents having authority from spouse to sign this retail installment sales contract and both accept liability, whether separated or divorced, for all purchases of family necessaries by means of coupon books or services purchases herein before notice is sent to seller by certified mail."
Plaintiff contends that this binds Mr. Walsh through the creation of an agency by estoppel. Quite aside from the general defenses of fraud, etc., defendant Mr. Walsh contends that he never saw the contract until he was served with the complaint. There is no basis for plaintiff's assumptions that Mrs. Walsh took a copy home and showed it to him.
Clause L specifically provides that both spouses accept liability for purchase of family necessaries. In the absence of any method for determining whether the coupons were ever spent, it is obviously quite impossible for plaintiff to prove that they were spent for necessaries. In any event -- and quite apart from Mr. Walsh's obligation, even in the absence of express agreement, to be bound for his family's necessaries -- he could not bound by Mrs. Walsh's signature in the absence of notice.
In denying the defense of usury, plaintiff asserts that N.J.S.A. 17:16C-41 controls the rate of charges on its time price differential ...