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Masi v. Mestice

Decided: February 20, 1951.


McGeehan, Jayne and Wm. J. Brennan, Jr. The opinion of the court was delivered by Jayne, J.A.D.


To trace in detail the many evolutions of this case from the Essex County Court of Common Pleas in which a final judgment was entered on November 20, 1947, in favor of the plaintiff, to the Appellate Division, where the judgment was affirmed (4 N.J. Super. 452), to the Supreme Court, 3 N.J. 380, and to the threshold of the Supreme Court of the United States, and return, would be informational but of little relevancy to the subject matter of the present appeal.

Now comes before us for review an order of the Essex County Court annulling a sale of the defendant's real estate on October 25, 1949, by the sheriff of Essex County made under the authority of a writ of execution which was issued on November 26, 1947, in pursuance of the final judgment.

In approaching the consideration of the present appeal, there are three recognizable postulates of major legal significance. They are that the process of execution issued out of a court of law, the property sold was real estate, and the summary proceeding in the County Court in which the order setting aside the sale was made, was conducted after the delivery of the deed by the sheriff.

There is abundant authority to sustain the general rule that courts of law possess the power of control over their

own processes and doubtless the power to annul and set aside a sale of personal property made under the process of execution where the process has been so used as to accomplish fraud, injustice, or oppression. Voorhis v. Terhune , 50 N.J.L. 147 (E. & A. 1887). The reason for the general rule is that a law court possesses a summary jurisdiction of an equitable nature for the purpose of preventing its own judgments and processes from being the means of working injustice, but this jurisdiction, certainly in case of the sale of real estate, expires when the process has been finally executed by the delivery of a deed to the purchaser.

In Marr v. Marr , 73 N.J. Eq. 643 (E. & A. 1908), Chancellor Pitney speaking for our former Court of Errors and Appeals explained (on p. 654): "An important and perhaps controlling circumstance is that in the outcome the property sold for only half its value. We cannot agree with the learned vice-chancellor that it is a sufficient answer to this to say that the law court from which an execution issues can set the sale aside for inadequacy of price. He cites Palladino v. Hilpert , 72 N.J. Eq. (2 Buch.) 270. In that case application was made to the court of chancery to restrain the sheriff from delivering the deed. In that juncture the application might have been made to the court out of which the execution had issued. After the delivery of the deed it is, of course, too late to do this. Where the law court sets aside a sale made under its process, it does so in the exercise of its equitable, not of its common, law powers. See Miller v. Barber , 73 N.J.L. (44 Vr.) 38, and cases cited. But these equitable powers are only incidental to the control which the court has over its own process of execution, and do not survive after the writ is fully executed. After the deed has been delivered to the purchaser, any application to set it aside for inadequacy of price must necessarily be made to the court of chancery, which court, in the exercise of its independent equitable powers, may either set aside the deed or treat the grantee as a trustee for others to the extent that he has reaped an undue profit from the transaction at their expense."

In Ludlam v. Penna. Realty Co. , 83 N.J. Eq. 130 (Ch. 1914), Vice-Chancellor Leaming remarked: "This jurisdiction of the law court exists until the process has been finally executed. * * * The amended bill, like the original bill, fails to disclose whether the sheriff's deed has been delivered." See, also, the decision of the same learned vice-chancellor in Margate Co. v. Hand , 86 N.J. Eq. 314 (Ch. 1916).

This limitation of the power of the court of law received more recent confirmation in the decision of Sapinsky v. Stout , 101 N.J. Eq. 813 (E. & A. 1927), in which it was stated (on p. 815): "Appellant was without any relief that could be accorded by the Circuit Court, because the deed from the sheriff, in execution of his writ, had been delivered before appellant discovered the situation, if the allegations of the bill are true."

The inadequacy of the remedy at law after the process had been finally executed was recognized in Century Transit Co. v. Public Service, &c., Inc. , 117 N.J. Eq. 520, 524 (Ch. 1935).

In Karel v. Davis , 122 N.J. Eq. 526 (E. & A. 1937), Justice Heher was cautious to say, "And courts of law likewise possess inherent equitable powers to so control their ...

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