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Friedman v. Tappan Development Corp.

Decided: November 13, 1956.

EDWARD FRIEDMAN AND GUS ZACKARAKIS, PLAINTIFFS-APPELLANTS,
v.
TAPPAN DEVELOPMENT CORPORATION, A NEW YORK CORPORATION, DEFENDANT-RESPONDENT



On certified appeal from the Appellate Division of the Superior Court.

For affirmance -- Justices Heher, Wachenfeld and Burling. For reversal -- Chief Justice Vanderbilt, and Justice Jacobs. The opinion of the court was delivered by Heher, J.

Heher

We certified for appeal the judgment of the Appellate Division of the Superior Court, 39 N.J. Super. 103 (1956), reversing a judgment of the Chancery Division awarding to plaintiffs specific performance of what was (and is) asserted to be a contract for the sale by the defendant corporation to plaintiffs of real property situate in the Borough of Old Tappan, New Jersey, bearing date February 15, 1954.

The Appellate Division concluded that the writing was "but a gratuitous option or continuing offer" to sell the lands in question at a given price per acre, revoked prior to acceptance, and entered judgment accordingly.

Reciting that Tappan had "offered to sell" to the plaintiff Friedman "certain lands" in Old Tappan to which it had title, "upon certain terms and conditions," the agreement declared that Friedman agreed to pay Tappan "at the rate of $400 per acre for each acre actually conveyed" to Friedman, and Tappan agreed "to convey said acreage" to Friedman "for the aforesaid sum of $400 per acre on demand by" Friedman; Tappan agreed "not to sell or convey any part of its real estate holdings in Old Tappan to anyone other than" Friedman "for a period of one year from the date hereof without" Friedman's "express written consent to said conveyance"; and the "purchaser," it was provided, "shall pay the cost of preparing a description of the property to be conveyed."

It was then stipulated that Tappan "make(s) no representations whatsoever as to the character of the real estate involved, zoning ordinances, state of title, marketability of title, liens, encumbrances, sewers, encroachments or restrictions of any kind whatsoever," and "agrees only to convey whatsoever title it has," and "In the event the title tendered" by Tappan "is rejected" by Friedman "for any reason whatsoever, then the only obligation of" Tappan "shall be to return the money paid, and there shall be no further claims by either party against the other, be it for cost of examination of title, survey, or other expenses of whatsoever type or nature"; and that the "sum of $400 is to be paid upon the execution of this agreement to Murray Zazeela, Esq., the attorney for" Tappan, "to be held by him until title to the first acre of land to be conveyed hereunder is delivered to" Friedman. And then comes the concluding provision: "However, in the event no conveyance is executed pursuant to this agreement for any land whatsoever for a period of sixty days from the date hereof, that is to say the 15th day of April, 1954, then this agreement shall be and become null and void and neither party shall have any rights or obligations hereunder other than the obligation to return said sum of $400 to" Friedman.

As found by Judge Conford, for the Appellate Division, delivery of the executed drafts of the agreement "was not completed until March 5, 1954 or thereabout"; the plaintiff Friedman, "a lawyer, was concededly acting for his client, the plaintiff Zackarakis"; on March 16, 1954 "Zazeela, attorney for defendant, phoned Friedman and advised him the defendant 'would not go through with the deal,'" and "This was confirmed by letter of March 22, 1954 from Zazeela to Friedman"; "Thereafter Friedman advised Zazeela that his client insisted upon going ahead with the transaction and would take all the property"; "Defendant refused to accede and offered to return the $400 deposit mentioned in the agreement, but plaintiff declined the tender."

Plaintiffs contend that the writing "was a completed contract," but "if it were an option," it remains to inquire whether "there was the so-called promissory estoppel referred to by this court in" American Handkerchief Corporation v. Frannat Realty Co., 17 N.J. 12 (1954), in that "title to the premises was searched at a cost of $505, and in addition, a survey was made at a cost of $200," which, in fact, was included in the charge of $505. However, as the Appellate Division also found, "after negotiating, but prior to receiving defendant's signed copy of the agreement," Friedman on February 23, 1954 "wrote to a title company concerning the instant transaction, advising it that the arrangement required him 'to ascertain what I am buying,' that the acreage might be anywhere from 'five to six acres' to 'twenty to thirty acres,' and requesting that the title company 'unearth' for him the facts as to 'what I am buying,'" and "Friedman did not countermand the order at any time"; the title company "delivered to Friedman a survey of the subject property April 13, 1954," and "It also began a title examination of the property 'two or three weeks' prior to March 22, 1954 without express request therefor, acting on an assumption from the February 23 letter that such an examination was desired by the applicant"; and "Its location of the property had been completed by March 22 and it made no charge therefor," but "it did eventually bill Friedman $505 for

a survey and examination of the title and that sum was paid." And the holding was that in this regard there was not "factual reliance 'of substantial character' upon the offer"; the "offer was revoked March 16, 1954," and the evidence indicates that "had plaintiffs called off the title company on that date their expense, if any at all, would have been minimal," and "In short, this is not a case where 'injustice can be avoided only by enforcement of the promise,'" citing Restatement, Contracts, section 90.

The argument for defendant is that (a) the writing constituted an option merely, "not a binding contract," "nothing more than an offer" "not supported by consideration," "withdrawn before acceptance," citing American Handkerchief Corporation v. Frannat Realty Co., supra; (b) there was no "mutuality of obligation and the promise of Friedman was illusory," citing G. Loewus & Co. Inc., v. Vischia, 2 N.J. 54 (1949); (c) specific performance should not be decreed "where a description of the property is uncertain and undefined," and the "offer lacks definiteness and certainty and is vague," as to matters which need not be here particularized; (d) the "offer became null and void because no conveyance was executed within 60 days from the date of same"; and (e) the doctrine of promissory estoppel has no application where, as here, the "defendant did not induce the plaintiffs in any legal sense to incur expense in making the examination of the title," a course taken by plaintiffs to enable them "to determine whether it would accept the offer and purchase at the stipulated price," which "did not inure to defendant's benefit in any way," and "it clearly appears" that "had Friedman contacted the title company on ...


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