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Cooper v. Bergton

March 12, 1952


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


Defendant appeals from a summary judgment for $2,000 with interest and costs entered against him in the Bergen County Court upon plaintiffs' motion under Rule 3:56.

Plaintiffs engaged defendant, a broker, to effect a sale of their business. Defendant secured one Geentiens as a buyer. Defendant's employee, John P. Kuehn, Jr., who handled the negotiations, prepared an instrument which was signed by Geentiens and by Kuehn for defendant, as plaintiffs' agent, reciting the terms of sale and providing that "this agreement is subject to formal legal contract drawn by attorneys" and that Geentiens "hereby pays the sum of $2,000 check to said agent on account of purchase price, which sum the purchaser does hereby authorize B. J. Bergton to pay over to the owner of said business."

Geentiens abandoned the transaction and plaintiffs after unsuccessful demands upon defendant for the $2,000 deposit brought this suit to recover it. Defendant counterclaimed for commissions. The counterclaim was not affected by the

action under appeal and is pending in the County Court awaiting trial.

The test when considering a motion for summary judgment is for the court to be "quite critical of the papers presented by the moving party, but not of the opposing papers." Templeton v. Glen Rock , 11 N.J. Super. 1 (App. Div. 1950); Heuter v. Coastal Air Lines, Inc. , 12 N.J. Super. 490 (App. Div. 1951). Our review of the pleadings and of the supporting and opposing affidavits upon the motion does not persuade us that they show palpably that there is no genuine issue as to any material fact challenged by plaintiffs so that plaintiffs are entitled to a judgment as a matter of law.

Defendant's answer admits that he is holding the $2,000 and that he refuses to pay it over to plaintiffs, although disclaiming any personal interest in the sum and offering to pay the same into court. He alleges by way of a separate defense that "subsequent to the signing of the written agreement" plaintiffs and Geentiens "orally modified" the same and agreed that defendant should hold the $2,000 "in escrow pending the drafting and signing of a formal contract between Geentiens and the Coopers," at which time he was to pay the money to the Coopers; that "no such formal contract had ever been drawn up or signed, and defendant is uncertain whether to pay the sum in dispute to the Coopers, or to Geentiens." His affidavit states that not only plaintiff, but Geentiens also, through an attorney, has demanded payment of the deposit.

The affidavit of plaintiff Harry Cooper supporting the motion denies that "the terms of said agreement (were) in any wise orally modified." Opposing this is the affidavit of defendant's employee Kuehn stating that "At or shortly after the time when the aforesaid agreement of sale was signed, it was orally agreed between all the parties to the same that Gaston Geentiens should pay over the deposit of $2,000 to B. J. Bergton, for him to be held in escrow pending the passing of title and delivery of the Bill of Sale to Geentiens

by the plaintiffs in the instant suit; at which time B. J. Bergton was to pay over the said sum to the plaintiffs herein."

Summary judgment under Rule 3:56 should be allowed only in cases palpably free from doubt and clearly not against a defendant who, as here, disclaims any interest in the sum claimed other than one of self-protection against conflicting demands and offers to deposit the same with the court, basing his refusal to pay upon the alleged existence of an escrow of which he is the depositary and in which another not a party to the action claims an interest, Sorensen v. East River Savings Institution , 119 Misc. Rep. 297, 196 N.Y.S. 361 (Sup. Ct. 1922).

The allegations of the answer that the sale memorandum was "orally modified" are inept and not accurately descriptive of the legal effect which results from the events sworn to by Kuehn in his affidavit. The later agreement, if made, is not viewed in law as an attempt to vary the terms of the written memorandum and the rule that a written contract will be deemed to contain the parties' entire agreement is inapplicable. Kuehn's statement reasonably permits the inference of the subsequent creation by parol of an escrow of the check, or of the fund. An escrow may be created by writing or by parol, or partly by both; upon the deposit in escrow a contract between the parties as to the delivery by the depositary of its subject matter is created; the depositary becomes the agent for both parties as to such delivery; and neither party can alone rescind. Mecray v. Goldman , 102 N.J. Eq. 559 (Ch. 1928), affirmed 105 N.J. Eq. 583 (E. & A. 1929); Fred v. Fred , 50 A. 776 (Ch. 1901) (not in state reports). Since the depositary is bound by the terms of the deposit ...

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