This is a complaint seeking the following relief by the plaintiff: -- the removal of an alleged could on the title to a parcel of real estate resulting from a judgment levy made by the Federal Deposit Insurance Corporation; a judgment establishing the order of priority of alleged liens of the plaintiff and the Federal Deposit Insurance Corporation; the revival of a cancelled mortgage on the property involved and subrogation by the plaintiff to the rights of the original mortgagee, and for an injunction against further proceedings for sale under the judgment levy by the Federal Deposit Insurance Corporation.
The defendant Bitler, by way of counterclaim, is seeking a judgment against the plaintiff arising out of a breach of a covenant in a deed from plaintiff to him, if the Federal Deposit Insurance Corporation's judgment is determined to be an encumbrance on the premises. He seeks to recover not only the return of the purchase price, including a cancellation of a purchase money mortgage given to plaintiff, but various other expenditures made by him as well.
The defendant Watson, by way of counterclaim, is seeking a judgment against Bitler arising out of a breach of several covenants in an agreement of sale executed by him and Bitler, if the Federal Deposit Insurance Corporation's judgment is determined to be an encumbrance on the premises. He seeks to
recover not only the return of the money paid on account of his purchase, but various other expenditures made by him, including the cost of improvements to the premises, and as well to be subrogated to any judgment rendered to Bitler against the Camden County Welfare Board.
The facts generally are not in dispute and I herewith specially find such facts to be as follows:
Annie Vandegrift obtained title to the premises commonly known as 119 North Eighth Avenue, Haddon Heights, New Jersey, on October 6, 1906.
On November 15, 1930 the First National Bank and Trust Company of Blackwood, New Jersey, recovered several judgments against Edward H. Vandegrift, husband of Annie Vandegrift, and other defendants as well.
On or about February 18, 1939 the said First National Bank and Trust Company of Blackwood, New Jersey assigned these judgments to the defendant, Federal Deposit Insurance Corporation.
On May 29, 1936 Annie Vandegrift and Edward H. Vandegrift executed and delivered to the Haddon Heights Building and Loan Association a mortgage in the amount of $1000.00, which said mortgage was thereafter recorded on July 6, 1936.
On June 23, 1936 Annie Vandegrift and Edward H. Vandegrift, theretofore having made application to the Camden County Welfare Board for old age assistance, entered into an agreement in conformity and compliance with P.L. 1936, chapter 31, page 61, section 10, (R.S. 44:7-14).
Under date of August 1, 1936 the Camden County Welfare Board executed a certificate of notice of agreement to reimburse which was recorded September 21, 1936 in the office of the Clerk of Camden County.
On December 10, 1941 Annie Vandegrift died, leaving a last will and testament under and by virtue of the terms of which she devised the property here involved to her husband, Edward H. Vandegrift.
On March 3, 1942 the Camden County Welfare Board executed a certificate of reimbursement, which was recorded on April 9, 1942 in the office of the Clerk of Camden County, exhibiting
that advances had, to that date, been made to Annie Vandegrift in the amount of $1211.00.
On September 21, 1942 the Camden County Welfare Board recorded a certificate of reimbursement in the office of the Clerk of Camden County exhibiting that up to July of 1942 advances had been made to Edward H. Vandegrift in the sum of $1552.00.
On June 6, 1944 Edward H. Vandegrift died, having left a will, under and by the terms of which he devised the property involved to his wife, Annie Vandegrift. She having predeceased him, title vested in his heirs-at-law.
On September 7, 1944 the said heirs-at-law of Edward H. Vandegrift voluntarily conveyed the premises involved to the Camden County Welfare Board in satisfaction of its claim for reimbursement. Said deed was recorded on November 11, 1944, at which time the said Camden County Welfare Board obtained affidavits of title from the grantors, which did not exhibit or show the judgment presently held by the Federal Deposit Insurance Corporation.
On February 28, 1945 the Camden County Welfare Board paid $200.00 on account of the mortgage above referred to, held by the Haddon Heights Building and Loan Association. On March 31, 1945 said Camden County Welfare Board paid the sum of $578.74 due the Haddon Heights Building and Loan Association, said sum being the balance due on account of said mortgage. Prior to the payments made on account of said mortgage, the Camden County Welfare Board obtained from the Market Street Title and Abstract Company a search or abstract of title and thereafter obtained from said Market Street Title and Abstract Company a title policy, on neither of which instruments was there shown the judgment above referred to, now held by the Federal Deposit Insurance Corporation.
On April 12, 1945, said mortgage having been endorsed for cancellation, the same was recorded in the County Clerk's office on the same day.
On April 6, 1945 the Camden County Welfare Board conveyed the premises in question to Raymond L. Bitler. A part of the purchase price was satisfied by the execution and delivery
of a mortgage by him to the Camden County Welfare Board.
In the period of time that the said Raymond L. Bitler had title he expended various sums for repairs, improvements, taxes and fire insurance.
On March 26, 1945 Raymond L. Bitler entered into an agreement to sell the premises involved to Jesse W. Watson for a total consideration of $4250.00, said consideration being satisfied by the payment of $500.00 in cash and installment payments of $50.00 per month for 18 months, all of which said payments were made. Said agreement provided for a warranty deed, as follows:
"4. The title to be delivered shall be a marketable title and shall be free and clear of all encumbrances including municipal liens and assessments and liability for assessments for improvements now constructed (except as herein stated), this clause to be operative as of the date of this agreement, and the title is to be subject to all existing restrictions of record, the seller, however, guarantees that there are no restrictions in any conveyance or plans of record affecting the said premises, which will prohibit the use and/or occupancy thereof as a dwelling and the premises shall be conveyed in the same condition as the same now are, reasonable wear and tear excepted."
Watson was given actual possession under the terms of said agreement.
During the time the said Watson was in possession he expended various sums for improvements and repairs.
Watson, in preparation for final settlement and closing, ordered a title policy. Upon the receipt of the search the Federal Deposit Insurance Corporation's judgment was disclosed. Upon advice thereof to Bitler and the plaintiff, after execution by Federal Deposit Insurance Corporation, this action was eventually commenced.
On September 4, 1946 the Federal Deposit Insurance Corporation issued an alias execution under its judgment against Nelson Dyer, et als.
On October 23, 1946 the Sheriff of Camden County advertised the premises for sale on November 22, 1946.
The first question to be determined is whether the Camden County Welfare Board is entitled to a lien upon the real estate here involved for money advanced for old age assistance to
Annie Vandegrift and Edward H. Vandegrift. If the answer to this query is in the affirmative, then whether such lien is prior to the judgment now held by the Federal Deposit Insurance Corporation.
If the plaintiff is entitled to any lien on the premises it must be as a result of the provisions of R.S. 44:7-1 et seq., R.S. 44:7-14 provides, as far as here pertinent, in part as follows:
"Every county welfare board shall require, as a condition to granting assistance in any case, that all or any part of the property, either real or personal, of a person applying for old age assistance be pledged to said county as a guaranty for the reimbursement of the funds so granted as old age assistance pursuant to the provisions of this chapter, and the total amount of the assistance so granted shall become a lien upon any lands in the ownership of such person, which lien shall have priority over all unrecorded encumbrances."
There are generally three kinds of liens recognized in our judicial system, (1) common law; (2) equitable, and (3) statutory. There is, of course, no common law lien under which the plaintiff could claim any right of priority for the repayment of the monies advanced by it out of the real estate originally owned by Annie Vandegrift and subsequently by Edward H. Vandegrift, nor is the plaintiff entitled to an equitable lien by reason of its advancement. It becomes apparent, therefore, that the lien, if any, to which plaintiff was entitled must be a statutory lien and must arise as a result of the foregoing cited section of the Revised Statutes. The defendant Federal Deposit Insurance Corporation, if it is entitled to any priority, is so entitled by virtue of R.S. 2:27-252, and is entitled also only to a statutory lien.
It becomes important to decide what the expression "lien upon any lands" as employed by the legislature, encompassed. The principal inquiry is to ascertain the intent of the legislature and the significance of the word "lien."
In Cattell v. Rehrer , 94 N.J. Eq. 292, 119 A. 374, the court said, at page 294, as follows:
"Where, as here, the liens asserted are both statutory liens, all decisions appear to be uniform to the effect that the primary inquiry ...