creation, perfection and priorities in multistate transactions.
Therefore, although the parties purport to dictate the law which will govern, these provisions are for naught to the extent they are governed by § 9-102 and § 9-103 of the Code. Since Article 9 deals only with security interests, the parties choice as to what law shall govern other aspects of the agreements is valid and will be applied.
Case law within the Third Circuit seems to disagree as to whether a federal court sitting in a diversity action is governed by federal or state law with respect to the authority to take judicial notice of the laws of a sister state.
One line follows the view that under Erie v. Tompkins, supra, state law is controlling.
The other cases take the view that Erie did not affect a federal court's ability to take judicial notice of a sister state's laws in that Erie merely dictated the applicable substantive state law, not how it is brought to the attention of the court.
F.R. Evidence 201, Act of January 2, 1975, Pub.L.No. 93-595, § 1, 88 Stat.1930, which states the only rule of evidence on the subject, now spells out the provisions for judicial notice of adjudicative facts. Taking the view, as I must because of this recent enactment by Congress, that federal law governs the taking of judicial notice as to adjudicative facts, I find that a sister state's laws are "capable of accurate and ready determination by sources whose accuracy cannot reasonably be questioned" and thus capable of judicial notice. I, therefore, take notice of all the relevant states' statutes.
In a contract case, the party relying upon the allegedly valid contract has the burden of establishing its validity. Further the breach of a contract may not be presumed, the burden rests on the party who asserts it to prove it. Shapiro v. Solomon, 42 N.J.Super. 377, 386, 126 A.2d 654 (App.Div.1956); Terminal Const. Corp. v. Bergen, etc. Authority, 34 N.J.Super. 478, 487, 112 A.2d 762 (App.Div.1954); modified 18 N.J. 294, 113 A.2d 787 (1955).
The plaintiffs contend that where the intent of the parties as to the meaning of contract terms is at issue, the language must be construed against the party who prepared it. Paley v. Barton Savings and Loan Ass'n., 82 N.J.Super. 75, 83, 196 A.2d 682 (App.Div.1964), Cert. denied, 41 N.J. 602, 198 A.2d 446 (1964); Meehan v. Kaveny Bros. Oil Co., 27 N.J.Super. 547, 553, 99 A.2d 841 (App.Div.1953). Thus they claim that the inclusion, at the insistence of Northrop, of the paragraph requiring consents must be interpreted in a light most favorable to the plaintiffs and against the defendant. It is unclear who actually was the draftsman of those agreements. The fact that the defendant requested that something be included regarding consents would, however, indicate that, at least as to that paragraph, it's counsel was the draftsman.
The requirement that a contract or section thereof be construed against the party who drafted it comes into play only when there is an ambiguity. Terminal Const. Corp., 18 N.J. 294, 113 A.2d 787 (1955); Herbstman v. Eastman Kodak Co., 131 N.J.Super. 439, 446, 330 A.2d 384 (App.Div.1971), Rev. on other grounds, 68 N.J. 1, 342 A.2d 181, 342 A.2d 181 (1971). As I indicated in my findings of fact, paragraph 6, it is unreasonable to say that consents were a necessary prerequisite to a valid security interest. The language is unambiguous and without doubt, in that it states that consents are to be obtained only if needed. Plaintiffs claim that it is necessary to obtain the consent of owners, general contractors, or whoever GERI had contracts with. As indicated in my findings, it did not appear that the consent of any such parties ever became necessary. Now, in an attempt to buttress their claim, plaintiffs say that it was also necessary to obtain the consents of the materialmen and laborers. I find no support for this contention either in the agreement itself or in any evidence introduced. This is further supported by the fact that GERI sent out letters seeking consent, but only of the project owners, not of the laborers or anyone else.
Plaintiffs cite N.J.S.A. 2A:102-10 & 11 in an attempt to further fortify their claim that it would be necessary to get the consents of labormen and materialmen in order to create a valid security interest. This is based, in part, upon the consent argument already disposed of and also on the basis of the fact that these statutes create a criminal penalty for the diversion of funds due these people.
It is axiomatic that a statute existing at the time a contract is entered into becomes a silent part of that contract. Red Bank Bd. of Ed. v. Warrington, 138 N.J.Super. 564, 568-569, 351 A.2d 778 (App.Div.1976); Gibraltar Factors Corp. v. Slapo, 41 N.J.Super. 381, 384, 125 A.2d 309 (App.Div.1956), Aff'd. 23 N.J. 459, 129 A.2d 567 (1957). Thus N.J.S.A. 2A:102-10 and 11 automatically became a part of these agreements.
Plaintiffs claim that enforcement of this agreement is against public policy and that since there is a criminal penalty imposed for violating the Act, the contract is void.
The defendant does not contest the fact that the rights of labormen and materialmen are superior to its rights. Nor does it appear that the defendant intended, by entering into those agreements, to divert funds properly due and owing these people. Rather, the defendant points to the fact that no evidence was introduced that there was any money due these people other than the testimony of Doyle that there is currently due an amount of some $ 10,461.34 as of October 10, 1977. (See Plaintiffs' Exh. 13). Furthermore, it was not shown that the plaintiffs have had or will have any difficulty in paying the amounts due if the security agreement is found valid and the defendant is allowed to foreclose on the collateral. Since the superiority of the labormen's and materialmen's claims is uncontested and, in fact, their right to payment is guaranteed by statute, the plaintiffs' claim in this regard is ineffective.
Finally, the plaintiffs argue that section 9-318(4) which provides,
"A term in any contract between an account debtor and an assignor which prohibits assignment of an account or contract right to which they are parties is ineffective."