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Frega v. Northern New Jersey Mortgage Association

Decided: July 22, 1958.

NICHOLAS P. FREGA AND SUSAN FREGA, HIS WIFE, PLAINTIFFS-APPELLANTS,
v.
NORTHERN NEW JERSEY MORTGAGE ASSOCIATION, A NEW JERSEY CORPORATION, AND LAWYERS MORTGAGE AND TITLE COMPANY, A NEW YORK CORPORATION AUTHORIZED TO DO BUSINESS IN THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS



Stanton, Hall and Gaulkin. The opinion of the court was delivered by Gaulkin, J.A.D.

Gaulkin

Plaintiffs sued in two counts. The case was tried with a jury. After plaintiffs rested, the trial court granted defendant's motion for judgment of dismissal of the second count. The defendants then rested without offering any testimony, even against the first count. The trial judge thereupon directed a verdict in plaintiffs' favor on the first count for $250. Plaintiffs appeal from the dismissal of the second count.

The court below dismissed the second count because in his opinion the proofs, at the end of plaintiffs' case, had not made out a cause of action. Therefore, to determine whether the trial court erred we must, in the light of the pleadings, examine the proofs as they stood at the time of the granting of the motion, bearing in mind that upon such a motion the court must accept the plaintiffs' proofs and view them in their most favorable light, giving the plaintiffs the benefit of every legitimate inference that may be drawn therefrom. Melone v. Jersey Central Power & Light Co. , 18 N.J. 163, 170 (1957). So viewed, we find that when plaintiffs rested, the proofs were as follows: Plaintiffs had

decided to have a house constructed for them by Lance-Smith Corporation, a developer. They needed financing for most of the cost. Lance-Smith introduced them to Northern New Jersey Mortgage Associates (hereafter called Northern). On October 16, 1956, Northern wrote plaintiffs that it had arranged for them a

"Construction loan in the amount of $7,500 for 6 mos. at 6% interest for time and amount used plus 2% service charge.

Permanent conventional loan in the amount of $11,500 for a period of 20 years at 5 1/2% int. The cost to you for the permanent loan will be 2% of the face amount of said loan.

It is understood and agreed that the closing will be handled under the auspices of Northern New Jersey Abstract Company.

Expiration date of this commitment will be April 16th, 1957 unless extended at our option."

Plaintiffs then signed and acknowledged a paper prepared by Northern which provided, among other things not here pertinent, that "It is understood and agreed that in the event said financing is arranged by a source other than Associates, in violation of this Agreement, such premises shall be subject to a lien in favor of Associates in the amount of $, unless expressly released in writing by Associates."

The amount was left blank. Why, does not appear. This paper, called a "financing agreement" by the parties, was recorded by Northern.

The construction loan of $7,500 was produced by Northern. The dwelling was completed about December 15, 1956. There was then due the builder, over and above the cash that the builder had received from the plaintiffs and the $7,500 construction mortgage money, a balance of $4,100. Northern was asked to produce the permanent mortgage during December 1956, but failed to do so, then or thereafter. Why, does not appear.

In January 1957 the defendant Lawyers Mortgage and Title Co. (hereafter called Lawyers Mortgage) purchased and absorbed Northern and has since continued its operations. Thereafter further demands were made by the plaintiffs for the permanent mortgage, to no avail. In the meantime

the builder was pressing for the $4,100. On February 6, 1957 plaintiffs' lawyer wrote defendant, enclosing a letter from counsel for the builder which demanded the balance due the builder. Plaintiffs' lawyer concluded his letter by saying that if defendants would not produce the permanent mortgage, plaintiffs would have to look elsewhere. The testimony does not show any reply from the defendant to that letter. Mr. Frega testified that he spoke to the defendant's agents repeatedly, and told them "that was our greatest concern at the time * * * threatened action by the builder."

On March 26, 1957 plaintiffs' attorney again wrote defendants, as follows:

"Not having heard from you a loan has been made from another source.

The commitment provided that the construction loan obtained by you was to run for a period of six months from October 16, 1956, the date of said commitment. Accordingly it is my expectation to be able to pay off the construction loan within the six-month period so that we will not run into any trouble with the River Edge B. & L. Ass'n.

The search of the title reveals the following: 'Financial Agreement made November 16, 1956 between Nicholas P. Frega and Susan Frega, his wife, and Northern New Jersey Mortgage ...


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