Civil action. On complaint.
This is a suit seeking the rescission of an agreement to sell a certain parcel of real estate in the City of Atlantic City, New Jersey, and as well seeking a declaration of a vendee's lien on the premises agreed to be sold for the amount of the deposit paid on account of said agreement, and the expenses incurred by the vendee for search fees. The complaint also seeks to have the agreement of sale surrendered and cancelled. The plaintiffs' action for cancellation is grounded on equitable and legal fraud in the inducement of the contract and for such a defect in title, in violation of the terms of the agreement of sale, as would warrant refusal of specific performance.
It is to be noted that this action seeks as relief more than an attempted recovery of the money paid on account of the purchase price, and under the allegations in the complaint, the jurisdiction of the Chancery Division of the Superior Court is properly invoked. Richeimer v. Fischbein , 107 N.J. Eq. 493; 153 A. 514; Reilly v. Griffith , 141 N.J. Eq. 154; 56 A. 2 d 502.
The agreement provided for the sale of a parcel of real estate at the southeast corner of Connecticut and Oriental Avenues, Atlantic City, New Jersey. Paragraph 4 of said agreement reads 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 an apartment house and the premises shall be conveyed in the same condition as the same now are, reasonable wear and tear excepted."
At the time and place set for settlement the plaintiffs attended but refused to complete the purchase, for a number of reasons. One of these reasons, as set forth, was that the defendants could not deliver "a marketable title * * * free and clear of all encumbrances." The foundation of this contention lies in the following set of facts.
By deed dated December 5, 1854, Camden and Atlantic Land Company conveyed a tract of land situate in the City of Atlantic City, New Jersey to the United States of America. Said tract, as described, contained 2.31 acres.
By deed dated August 16, 1878 the City of Atlantic City and various other individuals executed a deed to the United States of America containing the following phraseology:
"Whereas the party of the first part are the owners of lands situate in Atlantic City in the County of Atlantic and State of New Jersey fronting on the sea in the vicinity of the Light House belonging to the United States which lands comprise portions of lots or blocks numbers 7, 8, 10, 14, 15, 17, 18, 116, 117 and 118, as known and designated on a Map entitled 'Plan of Atlantic City' and also the ends of the Streets of Atlantic City terminating at the Ocean, And Whereas it is the purpose of the United States of America under the supervision of the Light House Board a bureau of the Treasury Department to adopt and put in force and effect precautionary measures to preserve the Light House and other property of The United States at Atlantic City and prevent the encroachments of the Sea thereon."
"And Whereas in carrying out such purposes it will become necessary for the United States to enter upon occupy and exercise control over the said property of the party of the first part and the shores in front of ...