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Baumann v. Munn

Decided: October 14, 1946.


On appeal from the Supreme Court.

For the appellant, Atwood C. Wolf.

For the respondent, Carpenter, Gilmour & Dwyer (Patrick A. Dwyer, of counsel).


The opinion of the court was delivered by

RAFFERTY, J. John R. Munn, with other members of his family, was the owner of a parcel of land situate in East Orange, Essex County. Intending to cause complete title to the premises to be vested in a corporation to be formed and to erect an apartment house dwelling on the premises, he contracted with Warnecke & Co., respecting the obtaining of two mortgage loan commitments to finance the planned operation. Warnecke was to obtain a permanent loan commitment in the amount of $130,000 from the Travelers Insurance Company and, against this, Warnecke was also to obtain a construction mortgage commitment in the amount of $117,000, in which latter commitment construction payments were to be mutually satisfactory.

Compensation to Warnecke was to be due and payable at the time that the commitments were "issued in the company's usual forms." An alternative arrangement for the payment of this compensation, in view of the disposition here made, is unimportant.

Within the time limitation of the authorization Warnecke produced a commitment of the Travelers Insurance Company, made subject to certain conditions precedent therein specified and which conditions precedent were additional to those set forth in the authorization to Warnecke and in Munn's application to Travelers for the permanent commitment.

One of these conditions required that Travelers be furnished with satisfactory credit information respecting the borrower. There were also requirements that the improvements to be erected must be commenced and completed on or before certain dates there specified. It was further provided that if any one or more of the conditions precedent be not fulfilled or the mortgage loan not closed to the satisfaction of Travelers on or before September 1st, 1941, the commitment, without notice, would automatically terminate and become of no further force or effect.

There is no proof that the construction mortgage commitment was ever obtained save only the testimony on behalf of plaintiff that this commitment, which, except for dates and amount, was substantially similar in form and content to the Travelers commitment, was procured and delivered to the representative of defendant. Plaintiff was unable to support this testimony with any proof from the records of the construction mortgage lender or any of its representatives. For the defendant it was denied that the construction mortgage commitment was ever delivered. The only documentary evidence on this point is found in a letter from counsel to Munn to the Travelers Insurance Company requesting an extension of time for the taking up of the permanent loan commitment of that company, wherein it is stated, "Yesterday, for the first time, we were informed that Lawyers Title Company of Richmond would represent the party who has agreed to place a construction mortgage on this property. We are proceeding as rapidly as possible to contact the Title Company in order to expedite the matter as much as possible." Plaintiff's witness admitted, however, that no arrangement or agreement was made between the parties respecting the detail of mutually satisfactory payments on this commitment.

After receipt of the Travelers' commitment arrangements were made for examination of title to the premises as a result of which it was learned that a partition proceeding was necessary to the making of good title. For this reason the letter requesting extension of time was written. This request was not granted. However, Warnecke continued to call for the credit information and to inquire as to the status of the partition proceeding. Matters continued in this wise until April, 1942, when Warnecke was advised by counsel for Munn that because of federal government regulations then in force limiting building construction Munn was prevented from completing the project. Warnecke thereupon made demand for his compensation. This demand was ignored by Munn and Warnecke assigned the claim to appellant herein who instituted suit thereon.

The complaint in the action for recovery of the claimed compensation alleged the making of the agreement with Warnecke and performance thereof and demanded the agreed compensation. In his answer Munn denied the allegations of the complaint and set forth a number of separate defenses, those with which we are presently concerned being that there was no performance by Warnecke on the theory that the Travelers commitment was a conditional commitment or counter proposal; that this counter proposal was ...

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