Clapp, Jayne and Francis. The opinion of the court was delivered by Jayne, J.A.D.
[39 NJSuper Page 527] Primarily it may be acknowledged that the Legislature has empowered the New Jersey Real Estate Commission in stated circumstances to decline to issue or renew and also to suspend or revoke the license of a broker who, inter alia , is adjudged to have pursued any conduct
which demonstrates bad faith or unworthiness. N.J.S.A. 45:15-17. In the present proceedings the Commission after an investigational hearing resolved that the appellant had been guilty of deportment of that objectionable nature, and for that cause denied him a renewal of his real estate broker's license. The legal and factual propriety of the Commission's action is the subject of this appeal.
The basic circumstances of essential relevancy are not in cogent respects in a state of dispute, hence a summarization of them will be sufficiently explanatory. Mr. and Mrs. Leonard D. Sullivan, who were desirous of acquiring a residence in Spring Lake, indicated to L. D. Edwards, a real estate broker, their interest in purchasing the property known as 109 Pennsylvania Avenue. From a sign displayed on the property, the Sullivans and the broker Edwards inferred that it was owned by the appellant, Louis Ponsi.
Negotiations between the broker Edwards and the appellant ensued, resulting in the settlement of the mutually acceptable terms of the conveyance. Edwards prepared in writing a conformable contract of sale in which he designated the appellant as the vendor and Sullivan and his wife as the purchasers, and transmitted it to the appellant for execution. The appellant forthwith informed Edwards that although he, Ponsi, was the actual owner of the premises, the record title thereto was in his corporation having the name Lakeview Gardens and Homes, Inc. Edwards in consequence of that divulgement redrew the contract, substituting therein the designated corporation as vendor instead of the appellant individually. The contract of sale so altered was executed by the purchasers and by the appellant on behalf of the corporate vendor on August 23, 1954.
There are two paragraphs of the contract of sale which are of fundamental significance in relation to the subsequent conduct of the appellant who himself was the holder of a real estate broker's license.
"IT IS UNDERSTOOD AND AGREED that the party of the Second Part need a mortgage of $17,200.00 in order to close title. The party of the Second Part will make an application first to the
Veterans Administration for a mortgage loan of $17,200.00 and secondly to the Federal Housing Administration for a $17,200.00 loan. In the event a commitment is not received from either of the above sources, or any other source within THIRTY (30) DAYS, of the date of this agreement, then the party of the first part shall have the privilege of returning the deposit of $2,150.00 and declaring the contract null and void.
IT IS FURTHER UNDERSTOOD AND AGREED between the parties that in the event the parties of the Second Part cannot secure a mortgage of $17,200.00, they can request the return of the deposit of $2,150.00 and declare the contract null and void."
It eventuated that the purchasers were unable to obtain the specified mortgage loan commitment and in despair were obliged to nullify the contract and request the return to them of the initial payment thereunder of $2,150.
It appears that with funds supplied by the purchasers, Edwards in compliance with the instructions of the appellant and with agreement thereto had made the check dated August 24, 1954 in satisfaction of the initial payment payable to one Carl Klein, an attorney, with the notation thereon, "Deposit of Leonard D. Sullivan, in trust for Louis Ponsi." It was the indubitable intention to place the down payment in escrow to await either the consummation or the contingent nullification of the contract for the contemplated failure of the purchasers to achieve the requisite mortgage loan.
Unavailing demands were made upon the appellant by Edwards and by Mr. Sullivan for the refund of the $2,150. The appellant declined to authorize his attorney, Mr. Klein, to return the deposit so held in escrow, although he himself seems to have deemed it to be the contractual obligation to do so. His obduracy and the inflexibility of his attorney, the escrow agent, persisted until a situation arose wherein Mr. Sullivan was in dire need of immediate funds. He engaged an ...