On appeal from the Superior Court of new Jersey, Law Division, Somerset County.
Conford, Pressler and King. The opinion of the court was delivered by King, J.A.D.
[168 NJSuper Page 171] We granted leave to appeal in this case to consider the important question of the right of a secured
party to repossess the secured property, here a motor vehicle, or to obtain alternative relief, after default in payment, when the vehicle is in possession of the State following seizure but prior to entry of judgment of forfeiture under the provisions of the Controlled Dangerous Substance Act, N.J.S.A. 24:21-1, et seq.
N.J.S.A. 24:21-35(b)(4) generally confers upon the State the right to seize vehicles used in transportation of narcotic drugs where the owner knows of or consents to the illegal carriage. Subsection (c) thereof was adopted by amendment, L. 1975, c. 42, § 1, to protect the rights of secured parties. It states:
(c) The forfeiture of any conveyance encumbered by a bona fide security interest shall remain subject to the interest of the secured party if he neither had knowledge of nor consented to the act or omission;
This amendment, and indeed the entire act, was derived substantially from the Uniform Controlled Dangerous Substance Act. Subsection (c), supra , is identical to the § 505(a) (4) (iv) of the Uniform Act except that the words "shall remain subject" are substituted for the words "is subject" in the Uniform Act. 9 Uniform Laws Annotated 337 (1973). We attach no significance to this slight variation in language. Before the 1975 amendment adding subsection (c) to N.J.S.A. 24:21-35(b)(4) an innocent secured party had no protection against a forfeiture. Our search has uncovered no cases in the country treating the question although the Uniform Act has been adopted in 46 jurisdictions. 9 Uniform Laws Annotated 47 (Supp. 1978). There is no extant legislative history available on the 1975 amendment.
The following facts are germane to the case before us. On March 23, 1976 Marge Colon, the owner of the subject vehicle, executed an installment note and security agreement creating a security interest in this 1976 Pontiac Firebird in favor of Allstate Enterprises, Inc. (Allstate). The total amount secured was $4,638.24 payable over 36 monthly installments.
Allstate's security interest was noted on the certificate of ownership issued by the Division of Motor Vehicles. Colon defaulted on the November 1977 installment and on all subsequent ones. The vehicle was seized by the State on February 11, 1978 consequent upon Colon's alleged use of it to transport drugs. The car has been in the State's possession since. Colon was indicted in September 1978 and her criminal trial is pending.
The complaint in this forfeiture action was filed on March 30, 1978. Allstate thereafter filed a "claim of secured party" and in May 1978 filed a notice of motion for an order directing the State "to deliver the motor vehicle * * * to Allstate or in the alternative to make payment of the sum of $2,013.66 [the balance secured] with reasonable attorney's fees" to it. On June 6, 1978 Allstate's motion was denied without prejudice and the State was ordered by the trial judge to attempt to move the forfeiture case to trial within 30 days. On June 23 the State's motion for summary judgment of forfeiture was denied. The case was not moved for trial. The reason is not apparent from the record.
Allstate renewed its motion for possession of the vehicle or payment of the lien on October 6, and in an opinion issued on December 11 the trial judge granted relief to Allstate in the alternative, directing that either (1) the State surrender possession of the vehicle to Allstate for sale pursuant to law, with Allstate to deposit any surplus realized above its secured interest and expenses with the clerk, or (2) the State pay to Allstate the amount due on its security interest and its reasonable attorney's fees in return for an assignment of the security interest. We granted the State's motion for leave to appeal and affirm.
The State contends that it should not be required to exercise an election to surrender the vehicle to the secured party or pay off the lien until after a final judgment of forfeiture. The State does not here contend that the vehicle is needed for evidence in the pending criminal ...