On appeal from the Superior Court, Chancery Division, to the Appellate Division; certified by the Supreme Court on its own motion.
For affirmance -- Chief Justice Vanderbilt, and Justices Case, Oliphant, Wachenfeld and Burling. For reversal -- None. The opinion of the court was delivered by Case, J.
[4 NJ Page 611] The appeal is from a judgment of the Superior Court, Chancery Division, Essex County. The judgment "cancelled and rescinded" a contract between The Mennen Company as vendor and plaintiff's assignor as vendee for the sale of real estate; awarded $15,937.50 to the plaintiff against
the defendant The Mennen Company; ordered that in default of the payment of that judgment the plaintiff have a lien for that amount on the premises, or in lieu thereof a lien for that amount on a mortgage given on the premises by Broad and William Corporation to the defendant The Mary Lou Corporation; and dismissed a counterclaim filed by The Mary Lou Corporation.
The complaint grounded in a contract entered into on January 26, 1948, between The Mennen Company and David L. Ross, plaintiff's assignor, wherein The Mennen Company agreed to sell and convey the premises known as 869 to 873 Broad Street in the City of Newark. The contract called for a deed of bargain and sale and required the purchaser to pay a consideration of $525,000, of which $15,000 was to be paid on the execution of the contract, $65,000 on delivery of deed and $445,000 by a purchase money bond and mortgage to be prepared by the attorneys for the seller. The contract contained the following provisions:
"Conveyance of the above-described premises will be made subject to state and municipal requirements relating to lands and buildings, their construction and use, and violations thereof, if any; subject to rights of tenants, lessees or occupants; subject to facts disclosed by survey, copy of which is annexed, and to such additional facts as will be disclosed by a current survey.
"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."
The complaint charged a default against The Mennen Company in its obligation to convey and counted against it for recovery of the $15,000, deposit money (with interest) paid on execution of the agreement. It charged that The Mary Lou Corporation was the creature and nominee of The Mennen Company, that it purchased the property with knowledge of the contract, and that the judgment should run against it and be a lien upon the land and the corporate assets in the event of default in payment by The Mennen Company. Both defendants answered, and The Mary Lou Corporation counterclaimed on a loss alleged to have been caused by plaintiff's failure to take title.
Following the execution of the contract the seller ordered an examination of the title from the Lawyers Title Guaranty Company and, on or about February 1, 1948, received a preliminary report thereon. It also obtained a current survey of the premises. Both the report of title and the survey were forwarded to plaintiff's attorneys on February 18, 1948. The report enumerated nineteen or twenty items which, it stated, would, together with any other estates, liens, defects and questions which might be found in continuing the search, be excepted from the company's guarantee unless documentary evidence of their removal be submitted and found satisfactory to the company. A few, but by no means all, of the exceptions such as those relating to matters shown on the surveys were, because of the pertinent provisions of the contract, supra, not subject to objection by the purchaser. Later herein we say that none of the exceptions itemized in the report were removed. That statement will be understood as referring to such of the proposed exceptions as were not excused by the contract.
On August 17, 1948, a stipulation was entered into in writing fixing the closing of title for September 27, 1948, at twelve o'clock noon at the office of the attorneys for the seller, and time for the ...