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Neighbor Denies at Hearing He Tried to Block Sale of House Because Buyer Was Jewish

A New Jersey businessman denied at a hearing before the State Civil Rights Division here yesterday that he had acted to prevent the sale of a neighbor’s house in the affluent suburb of Essex Fells because the prospective buyer was a Jew. John C. McDonough, a tire dealer and a member of the State’s Legalized Games of Chance Control Commission, admitted that he objected to the sale of the house to Myron S. Lehman, a Jewish lawyer of Short Hills, N.J., but for other reasons.

Mr. McDonough’s hearing, which opened yesterday, was the first civil rights case in which neighbors who allegedly violated anti-discrimination statutes faced punitive damages, according to George S. Pfaus, director of the New Jersey State Division of Civil Rights. Mr. Pfaus is serving as hearing officer in the case.