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Lopez v. New Jersey Bell Telephone Co.

Decided: April 1, 1968.

HENRY O. LOPEZ, JOSEPH ZARCARO AND ANGELA ZARCARO, PLAINTIFFS-RESPONDENTS,
v.
NEW JERSEY BELL TELEPHONE COMPANY, A BODY CORPORATE OF THE STATE OF NEW JERSEY, DEFENDANT, AND ARTHUR J. SILLS, ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, DEFENDANT-APPELLANT



For reversal -- Chief Justice Weintraub and Justices Jacobs, Francis, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Jacobs, J.

Jacobs

[51 NJ Page 364] The Chancery Division ordered the Attorney General to withdraw his request that the Telephone Company discontinue services to the plaintiffs and granted a preliminary restraint against him. The Appellate Division allowed

leave to appeal but refused to stay the Chancery Division's action pending determination of the appeal. Thereafter it affirmed and we granted certification. 50 N.J. 88 (1967).

During 1966 the State Police investigated gambling activities in Monmouth County. Its investigation included surveillance of the Midway Stationery store, operated by the plaintiff Lopez and located at 1137 Springwood Avenue, Asbury Park, as well as the Neptune Soda Shop, operated by the plaintiffs Zarcaro and located at 1315 Corlies Avenue, Neptune Township. On several occasions Investigator Roon visited the Neptune Soda Shop and observed bets being placed there; on one occasion he placed a bet himself. Investigator Santelli visited the Midway Stationery store on several occasions and observed lottery operations being conducted there; on one occasion he tried to place some money on numbers but was told that he was a stranger and that in any event numbers were being received "later on."

On September 23, 1966 detailed affidavits of their observations were submitted by the investigators to Judge Kingfield who, after finding probable cause, issued warrants authorizing searches of the Neptune Soda Shop and the Midway Stationery store. The warrants directed that if the illegal practices commonly known as bookmaking and lottery were found being carried on in the described premises, "all property, including monies" which were being used as the means of carrying them on were to be seized for disposition according to law. On September 27, 1966 gambling raids and searches were conducted in many Monmouth County establishments including those operated by the plaintiffs.

At the Neptune Soda Shop, the search resulted in the seizure of many slips of papers containing notations of number plays and horse race bets, along with copies of racing sheets and substantial sums of money hidden in various parts of the store. The investigators found a private telephone on the rear wall and a public telephone booth immediately outside the premises; although the telephones had different call numbers they had been illegally interconnected

and rang simultaneously. At the Midway Stationery store, paper bags filled with number slips were seized along with substantial sums of money, some of which was found hidden in various parts of the store; in a back room, the investigators found tables, chairs and a private telephone. While they were there the telephone rang and a party asked for "John" but hung up when told that he was busy. Following the searches and seizures at Neptune and Midway, appropriate complaints were filed for violations of the laws against bookmaking and lotteries. See N.J.S. 2A:112-3; N.J.S. 2A:121-3. The ultimate dispositions of the complaints are not set forth in the record before us and are not in any event controlling or material here. Cf. In Re Rosner, 24 Misc. 2 d 981, 205 N.Y.S. 2 d 476, 476-477 (Sup. Ct. 1960); Rubin v. Pennsylvania Public Utility Commission, 197 Pa. Super. 157, 177 A. 2 d 128, 131 (Super. Ct. 1962).

The overall supervision of the gambling raids was in the hands of Captain Dollar who has been a member of the State Police since 1938 and has been associated with gambling investigations since 1946. An affidavit by him described customary bookmaking and lottery operations and stressed the recognized place that the telephone occupies in them. He noted that the illegal activities at Neptune and Midway were "typical gambling operations" which were "dependent upon the use of the telephone for their success" and he referred particularly to the illegally interconnected telephones at Neptune and to the fact that the investigation had revealed that a considerable portion of the lottery business at Midway "was conducted at a table in the rear room where the telephone was located." Under date of October 4, 1966 Captain Dollar addressed a letter to the New Jersey Bell Telephone Company advising, inter alia, that the telephones at Neptune and Midway were used in connection with gambling operations and requesting their discontinuance. Thereafter the company complied with the request. See N.J.S. 2A:146-3; P.U.C. Reg. 14:403-5a.

After their telephone service was disconnected, the plaintiffs filed a complaint in the Chancery Division alleging that the company was under a general obligation "to serve the public without arbitrary discrimination," that it had discontinued service to the plaintiffs without just cause and at the insistence of the Attorney General, and that each plaintiff was engaged "at a lawful occupation" and would suffer irreparable harm if his telephone service remained disconnected. The complaint demanded that the company restore service and that the Attorney General be enjoined from requesting severance of the service. Nothing at all was said in the complaint about the gambling operations at the plaintiffs' premises.

An order to show cause was issued and answering affidavits were filed on behalf of the Telephone Company and the Attorney General. On the return date the parties agreed to dismiss the company on the representation that it would comply with any order issued by the Attorney General pursuant to the court's direction. After considering the briefs and affidavits, the Chancery Division filed an opinion granting injunctive relief pending final hearing. In the course thereof it recognized that telephone service could properly be discontinued where it was being used in connection with illegal operations (Paterson Publishing Co. v. New Jersey Bell Telephone Co., 21 N.J. 460 (1956)) but it took the position that there was "no evidence" before it establishing that the telephones in question had been or would be used illegally.

On his appeal, the Attorney General attacks the Chancery Division's view that there was "mere suspicion" rather than "evidence" before it. We consider his attack to be well founded. Unless we are to close our eyes to modern day realities we may fairly infer from the record that the telephones were essentials of the gambling enterprises at both Neptune and Midway. The illegal telephonic interconnection at Neptune, ...


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