This suit is brought to cancel and rescind a contract for the sale of real estate situate in the City of Newark, made between the defendant, The Mennen Company, as seller, and plaintiff's assignor as purchaser, and to impress a lien on the premises in the sum of $15,000 which represents the deposit made on account of the purchase price.
Defendant, The Mary Lou Corporation, was joined because it acquired title to the property with knowledge of the plaintiff's outstanding contract of sale.
The complaint, as amended, sets out three causes of action. The first two concern the defendant, The Mennen Company, since the relief sought is cancellation and rescission and the return of the deposit moneys. The third count is against the defendant, The Mary Lou Corporation, and seeks to impress a lien on the property.
The contract of sale contains a clause which reads:
"The seller's obligation to convey pursuant hereto shall have been performed if it conveys to the purchaser a title which will be guaranteed to the purchaser by Lawyers Title Guaranty Company of New Jersey, subject only to the exceptions herein set forth.
"Immediately upon the execution and delivery hereof the seller will order from Lawyers Title Guaranty Company an examination of title to the premises herein described. In the event of the unwillingness of said Title Company to insure title to said premises subject only to the exceptions specified herein, the seller shall pay the cost of such title examination and return the deposit of $15,000 made upon execution and delivery hereof and thereupon the parties hereto shall be relieved of all further obligations to each other hereunder. In the event that said Title Company reports its willingness to guarantee the title to said premises subject only to the exceptions herein stated, the purchaser shall, if conveyance be made pursuant hereto, contemporaneously with such conveyance pay to the seller the cost of such title examination and shall pay to such Title Company such additional charges as may be made by it for insuring title to said premises, subject only to the exceptions hereinabove specified."
Thus the title must have the stamp of approval of a third party, -- Lawyers Title Guaranty Company, -- and without such approval, except in the respects set forth in the contract, the parties would be relieved of all obligations thereunder.
The seller ordered an examination of the title from said Title Company and a report thereof was issued on February
1, 1948. A current survey also was ordered. Both report of title and survey were forwarded to plaintiff's attorneys on February 18, 1948. The report of title set forth some fifteen or more items of exceptions which were not "specified" in the contract of sale and without which exceptions the Title Company would not guarantee the title.
The Mennen Company, was at no time, and is not now, the owner of the property which it contracted to sell, and the contract so states. The premises in question had for some time been involved in foreclosure proceedings at the instance of the National Commercial Title & Mortgage Guaranty Company. A writ of fieri facias had been issued and returned unsatisfied. The Mennen Company undertook to purchase the foreclosure decree and cause the premises to be sold at sheriff's sale so that it, or its nominee, could purchase the property and convey the same to the plaintiff. The contract is dated January 26, 1948, and the sheriff's sale was held the latter part of July and later confirmed. The first title closing was set down during the latter part of August, 1948. The Mennen Company was not ready to convey because its title was not insurable and a stipulation of continuance was signed by the attorneys fixing September 27, 1948, at 12 o'clock noon as the date and hour for closing, and time was made of the essence. On September 27, 1948, the same situation obtained and a similar stipulation, likewise making time of the essence was signed, fixing October 15, 1948, as the closing date. On October 14, 1948, the closing date was again postponed and a third stipulation of continuance was signed fixing October 28, 1948, as the closing date and time was made of the essence.
On September 27, 1948, the plaintiff, with her attorneys, appeared and brought with them the sum of $65,000 in cash. The title was discussed and objections made thereto and the closing was again adjourned to November 3, 1948, at 3 P.M. and again time was made of the essence. On this latter date, plaintiff and her attorneys again appeared but no representative of the Title Company was present; none of the exceptions set ...