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Giumarra v. Harrington Heights Inc.

Decided: November 23, 1954.


Eastwood, Goldmann and Schettino. The opinion of the court was delivered by Goldmann, J.A.D.


Defendant Harrington Heights, Inc. appeals from a Bergen County Court judgment denying its motion for entry of judgment in its favor on its counterclaim against plaintiff Giumarra in the sum of $13,012.40, and awarding only nominal damages in the sum of $1. Plaintiff cross-appeals from the dismissal of his complaint and from the award against him on the counterclaim.

By contract dated August 28, 1950, William F. Ehret and his wife agreed to sell to one Nalbandian approximately 81 acres of land owned by them in the Borough of Harrington Park, Bergen County. The contract contemplated that Nalbandian would assign to a corporation, and he did so assign to defendant Harrington Heights, Inc., of which he is the vice-president. The Ehret contract provided for consecutive conveyances of tracts out of the main acreage at $1,600 an acre; the first tract (of ten acres) was to be conveyed within 60 days of August 28, 1950, and each subsequent tract (of 13 to 15 acres) within six months from the last conveyance. Time was made of the essence as to the conveyance of the second and subsequent tracts, thus making April 28 and October 28 of each year the deadline for each of these conveyances. Deeds were to pass at the office of Draesel & Dorfman, attorneys for the Ehrets. The purchaser posted security to insure performance, the security to be considered liquidated damages.

Harrington Heights, Inc. took title to four tracts and then, on October 10, 1952, entered into contract with plaintiff Giumarra whereby it agreed to assign to him the Ehret contract and its right thereunder to purchase the remaining land, then consisting of about 40 acres. Plaintiff was to pay defendant company $600 an acre over and above the price required to be paid for the land under the base agreement, of which sum defendant was to receive $400 an acre and the Ehrets $200 for consenting to modification of the terms of their agreement. Plaintiff paid defendant $1,600 as a deposit and agreed to pay $6,400 additional on or before December 1, 1952, "for which payment time is hereby made of the essence * * * at which time the agreement of August 28, 1950, will be assigned." Further, plaintiff was to give defendant an $8,000 second purchase-money mortgage on the lands in question on or before December 1, 1952, this amount to be subject to computation of the exact amount of land covered by the agreement at the rate of $400 an acre. Plaintiff agreed to assume the obligations of the basic contract and to perform them. He was to purchase the lands from the Ehrets in two sections, the first on or before December 1, 1952 and the second on or before October 31, 1953, each section to be approximately half the remaining lands. The consent of the Ehrets was made a condition of this contract to assign, inasmuch as the terms of the basic agreement had been modified.

Computation of the remaining acreage was to be made by a licensed civil engineer, the purchase price to be in accordance with that determination. Defendant company agreed to make immediately available to plaintiff a complete title abstract covering the premises described in the basic contract so that he might expeditiously complete his title search. Defendant also agreed to "provide, without cost * * * prior to December 1, 1952, a complete survey" of all property remaining in the Ehrets, "this survey to be prepared for the convenience of the said owners and the assignee." Defendant further agreed to install a culvert, the cost of which was to be divided equally.

By agreement dated October 21, 1952 between defendant company and the Ehrets, they assented to the contract between defendant and plaintiff and its modification of the terms of the basic agreement. It was specifically provided that the consent so given was in no way to be construed as a release of the company by the Ehrets from the basic contract of August 28, 1952, whose terms were to remain in full force and effect.

Late in October 1952, after the Ehrets had thus given their consent to his agreement with defendant, plaintiff requested the local health officer, Abicht, to make percolation tests to determine the porosity of the lands. Abicht did so and then prepared his report stating that a more elaborate method for sewerage disposal than the standard type of septic tank would be required, and that extensive draining and filling would have to be done to prepare the greater portion of the tract for building purposes. By mistake this report was delivered to Nalbandian instead of plaintiff. According to Abicht, Nalbandian asked him to rewrite the report and tone it down, but he refused. The report was returned to Abicht the same day and he delivered it to plaintiff's office on November 14 or 15. Plaintiff claims he did not read the report, but that his son, who was his partner, did; however, he admits Abicht told him what was in the report. Abicht testified that when he spoke to plaintiff about the contents of the report plaintiff said he perhaps would not take title because of the work necessary to prepare the ground for building purposes. Plaintiff denies he told Abicht he was no longer interested in buying the property.

On or about November 12, 1952 Donigian, attorney and assistant secretary of defendant company, ordered a metes-and-bounds description survey from the engineering firm of Hobelman, Augenti & Kuhn. Copies of the order were sent to Major & Carlsen, plaintiff's attorneys, and Draesel & Dorfman, representing the Ehrets. Hobelman had made an outline survey of the Ehret property in 1950. From the field notes and computation sheets made at that time he proceeded to prepare metes-and-bounds, courses-and-bearings

descriptions of the two parcels still remaining in the Ehrets, showing respective acreages of 19.538 and 16.993. He delivered these to Donigian about November 22. He prepared no map, but it may be noted in passing that the outline map he had made in 1950 had been attached to the agreement of October 10, 1952.

Donigian delivered the two descriptions to Carlsen, plaintiff's attorney, at his office on November 25, together with a 60-year abstract of title. A copy of the descriptions was also given to Draesel & Dorfman at about the same time. Donigian testified he went to Carlsen's office because he had learned from Draesel, as well as from Nalbandian and Hobelman, that plaintiff was not going through with the deal. He asked Carlsen if this were so and Carlsen said that as far as he knew plaintiff would complete the transaction. He further testified that Carlsen said the metes-and-bounds descriptions were sufficient for his purpose. There was some discussion on that occasion about the title abstract. According to Donigian, Carlsen asked if he could certify title for a preliminary binder, and he answered he could do so with the Lawyers Title Insurance Company of Richmond. However, he got no further word from Carlsen to go ahead.

Carlsen phoned Donigian on November 26 and, according to the latter, told him that plaintiff was not going through with the deal because Abicht's report showed poor porosity conditions. Donigian denied that Carlsen had told him plaintiff would not take the assignment because of defendant's failure to supply a complete survey. Immediately after receiving this telephone call, Donigian wrote Carlsen as follows:

"Reference is made to our telephone conversation today wherein you advised me that Mr. Giumarra would default on his contract of October 10, 1952, with Harrington Heights, Inc. The most I can do at the present time is notify my clients and await their advices."

A copy was sent to Draesel & Dorfman.

Carlsen apparently received this letter on December 1, and on that day wrote Donigian as follows:

"We are writing to acknowledge receipt of your communication of November 26th in the above matter. The contents of same are at variance with the discussion you and I had relative to the default on the contract.

We have not advised you that Mr. Giumarra would default on his contract of October 2, 1952 [ sic ], with Harrington Heights, Inc. We pointed out to you that Harrington Heights, Inc., had failed to provide without cost to our client, Charles Giumarra, a complete survey of all the property now remaining in the name of the owners, William F. Ehret and Johanna Ehret, under contract to be conveyed to Harrington Heights, Inc., [but] has given us a metes and bounds description of two tracts. We have no method whereby we could check the same with a survey. Mr. Draesel made it very clear prior to the execution of the contract that he and his client would insist upon such a survey. Hence, the reason for having included the paragraph relating to a survey in the contract. It was understood between all of the parties that the availability of this survey was a necessary pre-requisite to the obligation of the assignee to take over the contract with the Ehrets. And also for the Ehrets to carry on under all of the remaining provisions of the contract of the signing.

The default is that of Harrington Heights, Inc., and we are now making a demand on behalf of Charles Giumarra for repayment of all sums of money paid under the contract together with all damages flowing from the breach thereof by Harrington Heights, Inc. We have directed that our client compile his cost of engineering, etc., and upon receipt of same, we shall advise you that we shall expect payment of said costs."

Donigian says this was the first time Carlsen had raised any question about a survey. He did not answer the letter.

Donigian further testified that he had prepared a corporate resolution for defendant authorizing the assignment, and sent it to Draesel & Dorfman. All that remained to be done on December 1 was to endorse the Ehret contract so as to complete its assignment. Donigian admitted that he did not actually go to the Draesel & Dorfman office on that date, but he and his client were available throughout the day under an arrangement whereby Draesel was to call him as soon as they were needed.

Draesel testified he spoke to Carlsen on November 26, 1952 and asked if plaintiff were going to take the assignment.

He had heard from Abicht and Hobelman that he was not going to do so because of the porosity report, of whose contents Draesel knew. Carlsen informed him that plaintiff was not going through with the transaction because the report showed the farm was not good for building purposes. Draesel stated that the Ehrets were ready to proceed on December 1 and were in his office all day. He had received copies of the metes-and-bounds descriptions and was ready to close on that basis. The resolution of defendant company authorizing the assignment was in his hands before December 1; a warranty deed had been prepared. His arrangement with Donigian was that he was to call him the moment plaintiff and his attorney appeared at the office. They did not.

The testimony of Nalbandian, defendant's vice-president, was that defendant was ready, able and willing to carry out its agreement with plaintiff on December 1. As a matter of fact, defendant was ready to do so as early as November 26.

Carlsen's testimony runs counter to that of Donigian. He stated that when Donigian came to his office on November 25 he asked him if he would get title certified by the Lawyers Title Insurance Company of Richmond because he did not have time to go through the title abstract. Although Donigian had said he would, he did not do so. On that occasion Carlsen told Donigian that plaintiff was going through with the deal. The next day, November 26, he phoned Donigian asking if he had a survey; Donigian informed him he did not and that he understood plaintiff would not take the ...

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