[134 NJSuper Page 393] Subsequent to default being entered against Joe and Lillie Mae Young (defendants), New Jersey Mortgage and Investment Corp. (plaintiff), assignee of a consumer note executed by defendants on February 22, 1973 in connection with a home repair contract made with Berkeley
Priorities Corp., applied for an order for entry of Judgment under R. 4:43-2(b) supported by affidavits. The amounts sought in the complaint totaled $4,131.10, consisting of $3,402 unpaid balance of the note (comprising $2,520 unpaid principal, $105 finance charge earned to date of filing, and $777 unearned finance charge), $48.70 in late charges and $680.40 in attorney's fees, together with interest and costs.
The affidavit of an officer of plaintiff stated that $243 had been paid since the commencement of suit on February 5, 1975, leaving a balance of $3,207.70, including late charges exclusive of attorney's fees.
Home repair contracts are governed by N.J.S.A. 17:16C-62 et seq. The statute contains provisions regulating the imposition of late charges, N.J.S.A. 17:16C-71; the amount of the service charges, N.J.S.A. 17:16C-69; prohibitions against additional charges, N.J.S.A. 17:16C-70, and prepayment of amounts due under the contract, N.J.S.A. 17:16C-73.
The contract specified a cash selling price of $3,600, a finance charge of $1,260, and a contract price of $4,860 payable in 60 equal monthly installments of $81, to begin April 22, 1973.
Under R. 4:43-2, even where default has been entered, a court should review the papers and make appropriate determinations in order to fix the amount due. For this purpose the court may require the submission of additional proof. Douglas v. Harris, 35 N.J. 270 (1961); Metric Investment, Inc. v. Patterson, 98 N.J. Super. 130 (Law Div. 1967), aff'd 101 N.J. Super. 301 (App. Div. 1968).
The court requested a supplemental affidavit concerning how the late charges were computed and extended counsel an opportunity to submit a memorandum of law on the question of whether in this case the court should apply the general rule that where a note includes unearned interest on the principal and the holder of the note accelerates the maturity, then the holder is not entitled to judgment for unearned
interest. See 10 C.J.S. Bills and Notes § 251 at 748 wherein it is stated:
A note providing for the payment of the principal in installments at specified times, and requiring the payment of interest on each installment until maturity, does not require the payment of future unearned interest in the event the maturity date is hastened by virtue of an acceleration clause contained in the note.
See also, 45 Am. Jur. 2d, Interest and Usury, § 183 at 145-146. The court has found no New Jersey case construing the applicable provisions of N.J.S.A. 17:16C-62 et seq. in respect to this problem.
The court has not received a memorandum but has received a supplemental affidavit of an officer of plaintiff. That affidavit establishes that the late charges were added to the account of defendants in respect to 12 delinquent payments made after the respective due dates. Attached to the affidavit was a printed form of late notice that plaintiff sends out in its regular course of business. In that affidavit it is stated that such a notice was sent to defendants in respect ...