On appeal from a judgment of the Supreme Court.
For the appellant, Thompson & Hanstein.
For the respondent, William Charlton.
The opinion of the court was delivered by
HEHER, J. The judgment under attack was entered on a directed verdict for plaintiff. The complaint is in two counts. The gravamen of the first is that a sum of money, $2,131.50, escrowed with appellant, Atlantic Guaranty and Title Insurance Company, became plaintiff's property by reason of the fulfillment of the stipulated condition. The gist of the second is that the check of plaintiff's assignor, in the mentioned sum, payable to appellant, was "deposited" with the latter, upon condition that it was not to be "used" until appellant executed an accompanying written stipulation, outlining the terms and
conditions of the deposit; that although appellant refused to assent to the terms of the agreement, and for that reason withheld execution, it cashed the check and still retains the proceeds thereof, although no agreement for the disposition of the fund has been made.
These are the circumstances: On July 22d, 1930, one Joseph S. Byrne, acting for and on behalf of the Atlantic Hotels Corporation, agreed, in writing, to purchase from Morris Elfman a tract of land, situate in the city of Atlantic City, which was encumbered by a mortgage in the sum of $10,000, made to defendant Cleaver, and assigned by her to defendant Margate Trust Company as collateral security for unpaid loans. The mortgage was then in default, and foreclosure proceedings were imminent. There were tax arrears amounting to the first-mentioned sum. The vendee was anxious to avert foreclosure, and he asked for six months' extension of time for the payment of the mortgage from the date of the consummation of the sale. The contract of sale provided for the delivery of the deed and final settlement on October 1st, 1930, or on November 15th following, in event of the mortgage "being extended to" the date last mentioned, or any period beyond that date." There was evidence tending to establish that these negotiations eventuated in an agreement to grant the requested extension of time, and, in consideration thereof, to deposit the money in question upon the terms and conditions set forth in the paper which accompanied the deposit and which the depositary refused to execute, viz.: That the depositary would, on December 1st, 1930, "repay the same to Byrne, if on said day the above mentioned mortgage has been satisfied or all taxes, now a lien on the above mentioned premises, have been paid;" that "if said mortgage has not been satisfied or said taxes not paid," the depositary "is to continue to hold said money until the above mentioned mortgage has been fully satisfied, and if the above mentioned mortgage is foreclosed and the mortgagee does not receive the full amount of the indebtedness, then and in that event so much of the said $2,131.50 as is necessary to fully satisfy said indebtedness shall be paid to the above mentioned
mortgagee," and "the balance, if any, to be returned to the said Byrne, or his assigns." Counsel for the mortgagee, called as a witness by appellant, testified the understanding was that the deposit in question would be "paid to us in the event we have to foreclose and we buy the property in at the foreclosure sale and do not realize the money coming to us." The title officer of appellant, so the witness said, participated in the conference that resulted in this agreement. The deposit was made on September 30th, 1930. As pointed out, it was the money equivalent of the taxes then in arrears.
Now, this is what occurred: Byrne and his principal failed to consummate the sale. The taxes in arrears were not paid on December 1st, or thereafter, and the mortgage remaining unsatisfied, the mortgagee, Cleaver, on January 5th, 1931, instituted foreclosure proceedings, which eventuated in the sale of the mortgaged lands to the Margate Trust Company, on May 28th, 1931, for $100. On June 10th following, the sale was confirmed. On that day, Cleaver and the trust company contracted for the sale of the lands to another for $12,000 -- $2,000 in cash, and the balance to be secured by a purchase-money mortgage. The amount due on the decree, on the day of sale, was $11,000.01, and there were additional fees due the sheriff of $66.72, making the total amount $11,066.73. The unpaid taxes, then totaling $3,366.75, were paid by the mortgagee-purchaser. The net amount realized by the latter from the subsequent sale, including the mentioned purchase-money mortgage, was $11,633. Immediately after the sheriff's sale, the mortgagee-purchaser demanded and received from appellant the deposit in question, which, with interest, amounted to $2,447.28. There was no deficiency suit. The mortgagee, on June 10th, 1931, accepted $300 from Elfman -- $100 in cash and a note for $200 -- in full satisfaction of the obligation evidenced by the bond. It will be observed that the ultimate net loss to the mortgagee was $53.20.
Appellant contended, at the trial, that "this money was payable immediately after the foreclosure sale, if the sale did not bring enough to ...