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Korb v. Spray Beach Hotel Co.

Decided: December 29, 1952.

ABE KORB, PLAINTIFF-RESPONDENT,
v.
SPRAY BEACH HOTEL CO., A CORPORATION OF NEW JERSEY, DEFENDANT-APPELLANT. SPRAY BEACH HOTEL CO., A CORPORATION OF NEW JERSEY, PLAINTIFF-APPELLANT, V. ABE KORB, DEFENDANT-RESPONDENT



Eastwood, Goldmann and Francis.

Per Curiam

The judgment herein is affirmed on the opinion filed by Judge Smalley in the trial court, which follows:

"This litigation is presented by a vendee's complaint to recover part purchase-money, paid on a contract to convey land 'with the buildings and improvements thereon erected'; and a counter-complaint by the vendor for specific performance of the contract. Counsel for the respective parties agreed to a consolidation of these suits to be heard by the court without a jury. The propriety of the consolidation is in accordance with such power vested in the court by Const. 1947, Art. VI, Sec. 3, par. 4.

The facts reveal that on August 11, 1951 the vendee, Abe Korb, attended a public auction sale on the premises of the Spray Beach Hotel, Beach Haven, Ocean County, in the State of New Jersey. Over the auction block, the premises giving rise to the controversy in question, was sold to the vendee on a bid of $60,000. Immediately upon the conclusion of the sale a contract of purchase was duly executed by the parties, and a deposit of $9,000 paid down by the vendee.

The property agreed to be conveyed was designated as 'Parcels Nos. 1 and 3, Tract 'A', on Plan of Property of Spray Beach Hotel Co. * * *, and reference to said plan is hereby made for the full and complete description thereof.'

Both parties concede that a reference to said plan would disclose two encroachments: (1) overlap into the bed of Atlantic Avenue along the easterly side thereof to the extent varying from 2.9 feet at the northerly end of the hotel building to one foot at the southerly end of the building, for a distance of 158 feet, and (2) overlap into the bed of 23rd Street along the northerly side thereof to the extent of .7 of a foot, for a distance of 43 feet.

It is the vendor's contention that the vendee was chargeable with knowledge of the encroachments by reason of the fact that a reference to the plan aforementioned would reveal the same and, therefore, having knowledge of the encroachments he could not repudiate the contract of purchase.

This contention fails to take into consideration a vital, significant and meaningful covenant openly arrived at, without fraud, between the parties, to wit:

'Title shall be good and marketable and such as will be insured at regular rates by Central Jersey Title Company, otherwise the Buyer shall be repaid the deposit money paid on account, without interest, and he shall also be reimbursed for the expenses he may have been put to for title searches and thereupon the Seller's liability hereunder shall absolutely cease.'

In Love v. Fetters , 98 N.J.L. 784 (E. & A. 1923), the court had under consideration a covenant similar to this. The principle of law laid down therein is controlling in the case sub judice. In interpreting this clause the court said the 'plaintiff was not contracting for a

marketable title in the ordinary sense; he was stipulating for a title which the local company would insure, so that he could turn over the policy to a mortgagee or a purchaser.'

The parties herein stipulated that Exhibit P-1, introduced in evidence on behalf of the plaintiff Abe Korb, could be offered in evidence as the title report of the Central Jersey Title Company. In this title report, the title company, after alluding to the fact and measurements of the encroachments concluded: '* * * in our title policy we will make a specific exception that the title company will assume no liability and will make no guaranty that the building is entirely within the bounds of the insured premises and will specifically designate in the exception the extent of the overlapages into the street.' In other words, the attitude of the title company is that they will not be responsible or assume any liability nor will they insure that the building lies entirely within the bounds of the land in question. This position was unequivocal, and found further expression when the president of the Central Jersey Title Co., called as a witness by the vendor, reiterated the fact that his company would insure the land but not the building.

Contracts whose performance is conditioned on the approval of third parties are not unusual. 57 A.L.R. 1322 recognizes the principle that a contract may properly contain a provision in effect obligating the vendor to convey such a title as ...


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