The defendants seek to dismiss the plaintiff's complaint on the grounds that it does not state a claim upon which relief can be granted, and seek as well a more definite statement of the complaint. The latter motion for a more definite statement was orally determined at the time of argument. The former motion, therefore, requires present consideration.
Plaintiff alleges that on March 1, 1950, the defendants Manfredi, then being indebted to him in the sum of $25,000, executed an agreement, the pertinent portions of which read as follows:
"Whereas, the party of the Second Part loaned to the parties of the First Part the sum of $25,000.00, which was used in the erection and construction of said building, which the parties of the First Part promised to repay to the party of the Second Part at the time of the completion of said building; and
Whereas, the parties of the First Part have been unable to repay said loan and are desirous of securing the payment thereof to the party of the Second Part, and the party of the Second Part in consideration thereof has agreed not to enforce the payment of said debt until said buildings and lands shall have been sold;
NOW, THEREFORE, in consideration of the premises and of the mutual rights and benefits arising herefrom to each of the parties hereto, it is mutually agreed:
1. That to the extent of said sum of $25,000.00 the party of the Second Part has an interest in the lands and premises hereinafter described and the buildings thereon erected prior to the equity of the Parties of the First Part therein."
The agreement contained a description of certain lands and premises which the plaintiff alleges, by reason of mutual mistake, failed to encompass all of the lands intended to be covered. The plaintiff, by his complaint, conceives that the agreement was an "equitable mortgage" and a lien upon the property therein described. The complaint as well alleges that implicit in the terms of said "equitable mortgage" was the duty of the defendants Manfredi to make all reasonable efforts to sell the buildings therein described, and that failing in said duty, the payment of said debt might be enforced within a reasonable time after the date of the agreement. The complaint further alleges that the defendant Canzanese, at the time that the defendants Manfredi executed and delivered to him a mortgage on said premises, had actual knowledge of the existence of the plaintiff's "equitable mortgage" and constructive knowledge of said "equitable mortgage," which was recorded the day prior to the recording of the said Canzanese mortgage. Plaintiff now demands relief as follows: (1) reformation of his "equitable mortgage" to include lands not therein described, and (2) a foreclosure of said "equitable mortgage."
The defendants Manfredi allege that there is no absolute debt, but merely a conditional or contingent debt, and that the plaintiff agreed not to enforce the payment of the debt until the lands and premises were sold.
The gist of their motion is that the agreement which the said defendants Manfredi executed did not constitute an "equitable mortgage" on the premises therein described; that the defendants Manfredi were not obliged to sell the realty involved within a reasonable time after the date of said agreement, and that the plaintiff is not entitled to a foreclosure and sale of the property involved.
It becomes first necessary, therefore, to determine the nature of the instrument which is before us.
In J.W. Pierson Co. v. Freeman , 113 N.J. Eq. 268, 166 A. 121 (E. & A. 1933), the ...