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Deerhurst Estates v. Meadow Homes Inc.

Decided: May 5, 1958.


Drewen, J.c.c. (temporarily assigned).


This is a contract action tried without a jury, to resolve the terms of the contract in suit and determine whether or not there was a breach thereof by defendant. The issue of damages, if any, is left for determination by a separate trial, R.R. 4:43-2.

On June 14, 1954 plaintiff's assignor, Joseph S. Lenkowsky, and defendant entered into a contract in writing whereby defendant agreed to sell to Lenkowsky 267 lots located in the Township of East Brunswick, New Jersey, as "laid out and shown on a certain map entitled, 'Site Plan, Meadow View Estates, East Brunswick Township, Middlesex County, N.J.,' dated June 20, 1951." This map shows a division of the tract into 359 lots comprising 11 sections, on sections 1 and 3 of which defendant had already built. The remaining nine sections, with the exception of four lots therein reserved by the seller, comprise the lots involved in this transaction. The purchase price was computed on a basis of $425 a lot. On June 18, 1954 the purchaser assigned the contract to the plaintiff, a corporation owned by Lenkowsky. The defendant corporation is owned by M. Michael Meadow, who acted for it throughout these transactions. The lots were conveyed to plaintiff on August

2, 1954, for $40,000 cash and a purchase money note and mortgage for the balance. Both plaintiff and defendant are builders and developers, and the contract indicates plaintiff's intention to continue the development of the area commenced by defendant.

The contract of sale contains express warranties and a provision that "* * * warranties not performed before or at closing of title shall survive said closing and remain in full force and effect." Included in the warranties is the following:

"3. Seller represents and warrants that:

(b) The sub-division as outlined in the abovementioned site plan has been tentatively approved by the Planning Board of East Brunswick Township and all other agencies having jurisdiction over subdivision of lands.

(d) There is no regulation under or provision of Zoning, Planning, Building Permit, Building Ordinances of East Brunswick Township which is inconsistent with the original submission of the entire sub-division by seller as outlined by the above site plan as to lot sizes, street layout, grades, street improvements, or other requirements so that there is nothing in said ordinances or regulations thereunder that will prohibit the filing and approval of the remaining 7 sections and the erection thereon of buildings similar to those erected in Sections I and III and similar to the plans filed or proposed for Sections IV and V."

Plaintiff alleges that both these representations and warranties were and are false and untrue in that defendant had not received "tentative approval" from the Planning Board of East Brunswick Township subsequent to January 1, 1954, in accordance with the provisions of L. 1953, c. 433, sec. 18 (N.J.S.A. 40:55-1.18), which became effective on the date last stated; and that as a result of the lack of such approval plaintiff was put to the great additional expense of providing larger lots and of otherwise complying with more stringent specifications and requirements to entitle it to final approval for the building on five of the seven sections referred to in paragraph 3(d) of the contract, which would not have been the case had the warranties been true.

Defendant denies that any of the representations and warranties were untrue, but admits that it had not received approval from the planning board in accordance with the provisions of the cited statute (N.J.S.A. 40:55-1.18), its contention being that it had received a preliminary approval prior thereto, and that it is this approval to which the contract refers as "tentative approval."

Plaintiff contends that the parties contracted with reference to the law in effect on the date of the contract and that defendant is precluded from introducing parol evidence to alter, vary or contradict the terms of the contract. Defendant contends the words "tentative approval" were intended to convey the ordinary meaning of the words before the enactment of N.J.S.A. 40:55-1.18; that, since their use is ambiguous, they should be ...

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