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Freedom Finance Co. v. New Jersey Bell Telephone Co.

Decided: January 19, 1973.

FREEDOM FINANCE CO., INC., PLAINTIFF,
v.
NEW JERSEY BELL TELEPHONE CO. ET AL., DEFENDANT



Yanoff, J.c.c., Temporarily Assigned.

Yanoff

The issue here is whether N.J.S.A. 2A:150A-1, which became effective in 1971, may constitutionally be applied retroactively. The statute reads:

It shall be unlawful for any person to withhold or pay to another or purchase or have assigned to him, other than by order of court, any salary, wages, commissions, pay or other compensation for services, or any part thereof, due or to be become due to any employee and any such purchase or assignment, whenever executed, shall be void and unenforcible.

The dispute revolves around the words "whenever executed."

The factual context is simple. On or about October 12, 1966, plaintiff obtained in New York State a wage assignment from Helen Ruth Keys, also known as Helen Ruth Brown, in connection with a loan of money. Borrower defaulted, as a result of which plaintiff claims to be entitled

to exercise its rights under the wage assignment. Defendant employer, New Jersey Bell Telephone Company, refused to pay on the ground that payment was prohibited by N.J.S.A. 2A:150A-1. Plaintiff instituted suit against Bell, and asserted that the statute in question was unconstitutional. The Attorney General was brought in pursuant to the rules.

The burden of argument on a summary judgment motion has been borne by the Attorney General. Plaintiff contends that

1. The contract, having been executed in New York, is valid under New York law.

2. If New Jersey law is applied, U.S. Const. Art. I, § 10, and N.J. Const. (1947), Art. IV, § VII, para. 3, prohibit retroactive effect because plaintiff would thereby be deprived of a remedy for enforcing the contract which existed when made.

At oral argument plaintiff conceded that the State had the right to change statutory remedies affecting the enforcement of the contract. The gravamen of plaintiff's complaint is that the State may not impair a remedy upon which the parties had agreed by contract.

The language of the statute, its history, and other statutes relating to the same subject matter make it clear that the Legislature intended it to have retroactive effect. It must stand or fall on that basis.

The statute must be classified as among the enactments which protect the minimum living standards of the people of this State. Other statutes of similar tenor are minimum wage laws (N.J.S.A. 34:11-1, affecting public contracts; N.J.S.A. 34:11-34 et seq. , fixing minimum wage standards); statutes exempting assets from assignment or levy (N.J.S.A. 2A:19-12, 2A:26-4, 2A:17-24, 34:15-29); a statute controlling the order of income executions (N.J.S.A. 2A:17-52); a statute specifically ...


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