On appeal from the Supreme Court.
For the plaintiff-respondent, William A. Moore.
For the defendants-appellants, William Reich and Perlman & Lerner.
The opinion of the court was delivered by
CASE, J. The appeal is by the defendants from a judgment entered in the Mercer Circuit on a general verdict rendered by the court, sitting without a jury, in favor of the plaintiff and against the defendants in an action for the recovery of the amount of a mortgage that had been upon a property conveyed by the plaintiff's assignor to the defendants' assignees under the following circumstances:
Paternoster and others as vendees entered into a written contract with Lavinson and others as vendors for the purchase of other real estate. The purchase price was $45,000, and the vendees undertook to make payment of that amount as
follows: $200 in cash on the execution of the agreement, $2,500 in cash on delivery of the deed, $10,000 by the execution of a bond and mortgage in that sum. As to the balance of the purchase price the contract provides:
"The party of the second part (viz., the Paternosters) is to execute and deliver four general warranty deeds to the parties of the first part (viz., the Lavinsons) for the following four houses situated on Nottingham Way and known as Nos. 2523, 2525, 2533 and 2535, in the township of Hamilton, and State of New Jersey, size of each lot twenty-six by one hundred and seventy-five feet to a twenty-five foot alley in rear. The above houses are subject to first mortgages of $4,000 each at five and one-half per cent. and second mortgages of $1,300 each at six per cent. The second mortgages are payable mortgages (sic) of $50 each and every three months. Also subject to a third mortgage which is a note mortgage held by the First National Bank to secure the payment of $875 on each house. This note is to remain in full by paying interest until houses are disposed of by the parties of the first part or their assigns when it becomes due and payable in full at once."
The litigation arises out of a dispute as to who is ultimately liable for the payment of the third mortgage above referred to as "held by the First National Bank."
On the closing of the title the Paternosters made conveyance of the four Nottingham Way properties to the assignees of the Lavinsons by four certain deeds each of which contained this language:
"This property is conveyed * * * subject to a first mortgage of $4,000, a second mortgage of $1,300, and a third mortgage of $875."
There was no other provision relating to the encumbrances. Thus these four properties were contracted to be, and in fact were, conveyed by the Paternosters in payment of $32,300 of the $45,000 due from them on the purchase of the Lavinson real estate. They were conveyed at that bulk valuation without any covenants as to their valuation ...