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Heim v. Shore

Decided: May 22, 1959.

DAVID J. HEIM AND HILLBROOK ACRES, INC., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFFS-APPELLANTS,
v.
ANNA SHORE, SIDNEY SHORE, GERTRUDE R. SALTZMAN AND RAYMOND SALTZMAN, DEFENDANTS-RESPONDENTS



Goldmann, Freund and Haneman. The opinion of the court was delivered by Freund, J.A.D.

Freund

[56 NJSuper Page 64] This is an appeal from a judgment of the Superior Court, Chancery Division, dismissing plaintiffs' action at the conclusion of the six-day presentation of their case. Plaintiff, David Heim, a real estate broker who has engaged in building and development activities, sued for specific performance of an alleged oral contract by which the defendants agreed to convey to him on January 1, 1957

a 50-lot tract of land in Cinnaminson Township, Burlington County. In the alternative, plaintiffs claimed damages for breach of the contract or damages on the ground that defendants were unjustly enriched. The contract was purportedly made on or about June 10, 1954 with Heim personally, but he subsequently conveyed his interest in the agreement to the plaintiff corporation, Hillbrook Acres, Inc., of which he became a stockholder. The legal title to the land in question is held by the defendants Anna and Sidney Shore, but the former's sister, Gertrude R. Saltzman, and her husband, Raymond Saltzman, apparently have full power to deal with the land and to enter into a binding contract looking toward its sale. Mrs. Saltzman is in the business of "giving mortgages" and has in the past financed a number of land development projects in South Jersey.

Plaintiffs' general contention is that in 1954, when defendants agreed by written contract to sell to Heim for development purposes a 14-acre tract (hereinafter the "Woodside Lane piece") for $30,000, there also was an oral contract or "verbal understanding" that when the Woodside Lane piece was developed and sold to homeowners, Mrs. Saltzman would then convey 50 lots of the adjacent 80-acre tract for further development and sale by him. The adjacent tract (hereinafter "tract 2") contained 119 lots, but plaintiffs only argue that Mrs. Saltzman agreed to convey 50 of these lots on January 1, 1957, no time having been fixed for the transfer of the remaining 69 lots. There is nothing in the record to indicate the acreage of the 50 lots in question.

The defendants in their answer and in the pretrial order denied that the alleged oral agreement ever existed, asserted the defenses of the statute of frauds and laches, claimed that plaintiffs made expenditures in connection with the commencement of the development of tract 2 as volunteers and that plaintiffs were trespassers thereon, and maintained in the alternative that plaintiffs were at all times unable and without adequate means to perform their obligations under the contract.

The fact picture, as drawn by plaintiffs' proofs, emerges fairly clearly. In 1952 or 1953, while employed with the South Jersey Mortgage Company, Heim first met Mrs. Saltzman. In the fall of 1953 he established his own real estate brokerage office with a partner and represented her in purchasing property of about 60 acres. There were also a number of other land sales and mortgage transactions in which Heim and Mrs. Saltzman worked together. To indicate that they customarily used oral agreements, Heim testified that in 1953 she had sold him two tracts of land in Haddon Township known as the Cuthbert Park development, and that the second tract in the latter project had been conveyed to him pursuant to a verbal understanding that it would be so conveyed after the development of the first tract.

Early in 1954 plaintiff was interested in purchasing a lot for his own home, and Mrs. Saltzman showed him the Woodside Lane piece and the adjacent 80-acre tract. She suggested that he develop the land, and she would finance the project by selling it to him for a small down-payment, taking back a purchase money mortgage. By this time Heim had started in the building business. He testified that Mrs. Saltzman had approached him with charitable intentions and had said "it is nice to be able to help someone get started."

The two went to the office of John H. Heckers, an attorney who had represented parties previously concerned with tract 2. He had in his possession various maps which they had come to purchase. This meeting took place in early 1954, and at the trial Heckers recalled that the substance of the conversation was that Mrs. Saltzman was "backing" plaintiff in the development of the land, the reference being to both tracts.

In June 1954 Mrs. Saltzman conveyed the approximately nine-acre Woodside Lane piece to Heim for his check of $1,000 and a mortgage of $27,000, which was eventually discharged. The original $30,000 price had been based on

1,500 frontage feet at $20 per foot, but there was a reduction of lot frontage when sub-division plans were rejected by the Cinnaminson Township planning board. The rejection resulted in a decrease in the number of lots in this section from 14 to 11, and in added paving, sewerage and construction work, for all of which Heim was to receive a credit, in addition to the $2,000 reduction in price. This credit was to be applied to the down payment on the 50 lots in tract 2. The conveyance of the Woodside Lane piece was the first step in the execution of the agreement between plaintiff and Mrs. Saltzman for the sale of both tracts at $20 per frontage foot, on similar liberal mortgage terms.

Through a series of mesne transactions, title to the Woodside Lane section finally went into Hillbrook Acres, Inc., organized in 1955 by Heim and Melvin Funk and their wives. Heim and Funk each beneficially owned one-half of the corporate stock. One Kelley subsequently bought a one-third interest, and later, in 1956, Heim, John Sitzler, Sr. (an experienced builder) and John Sitzler, Jr., bought out Funk and Kelley. Heim and Sitzler, Sr., each owned 45% of the stock and the younger Sitzler, 10%. In a written agreement of March 2, 1956, within which Heim and the Sitzlers defined their respective rights as shareholders, it was stipulated that Heim held "an oral option on 80 acres of ground situate adjacent to the present plan of Hillbrook Acres, Inc.," and that the Sitzlers were to share, in proportion to their stock holdings, in his rights under the "said option."

Construction began on Heim's home in the Woodside Lane section in 1954. In August 1955 construction in that tract commenced on the first home for a customer. Sales continued nicely into 1956, and construction was started on 8 of the 11 lots in the section. One other lot was devoted to Heim's home, as noted, and another to that of Sitzler, Jr. Thus, by June 1956, there was only one lot still available in the Woodside Lane piece. One Sharp became interested in a lot in plaintiffs' development, but did not like

the location of the last available lot in Woodside Lane. He asked Heim about a ...


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