This is an action in equity instituted by Isidore Feldman to foreclose a mortgage held by him on the Commercial portion of the St. John's Project Area in Jersey City, title to which is vested in Urban Commercial, Inc. In this action Feldman joined, among others, the Jersey City Redevelopment Agency. The Agency counterclaimed for a declaration that the mortgage is null and void for the reason that it is in violation of deed restrictions and federal and state law. Feldman thereupon filed a third-party complaint against The Title Guarantee Company, the insurer of the mortgage.
By written stipulation, the parties to this action have submitted an agreed statement of certain facts and have presented two questions for determination by the court, as upon motion and cross-motion for partial summary judgment. Each party has expressly reserved other factual and legal issues so that entire resolution of the whole controversy by final judgment is not possible at this time. The decision herein is thus necessarily limited to the particular questions propounded upon the basis of those facts only upon which there is no dispute.
The stipulation of facts provides as follows:
"1. Prior to October 25, 1955, Jersey City Redevelopment Agency, (hereinafter called 'Agency') proceeding under authority of the provisions of Title I of the Housing Act of 1949, as amended,
42 U.S.C.A. § 1441, et seq. , and of the Urban Redevelopment Law, R.S. 40:55 C -1, et seq. , acquired the fee simple title to a tract of land in the City of Jersey City, which tract is commonly known and described as the St. John's Project Area, hereinafter called the Project Area.
2. On October 25, 1955, Urban Developers, Inc., (hereinafter called 'Developers') entered into a redevelopment contract with Agency which contract relates to the proposed redevelopment, by Developers of the St. John's Project Area (hereinafter called the Project Area) in the City of Jersey City.
Said contract shall be received in evidence as Ex. 1.
3. On June 11, 1956, Agency, in accordance with its undertakings as set forth in Ex. 1, conveyed two parcels of land lying in the Project Area to Developers.
3A. The first parcel of land so conveyed formed a part of the Project Area which was required to be redeveloped as a residential area. The first parcel (which contained 118,381 square feet or 2.718 Acres) was known, inter partes , as 'Section I of the Residential Area' (hereinafter called 'Section I'). The deed of conveyance for Section I was recorded on June 13, 1956 in Book 2679 of Deeds for Hudson County at page 45, etc.
A copy of said deed shall be received in evidence as Ex. 2.
3B. The second parcel of land so conveyed was the only part of the Project Area which was required to be redeveloped as a business area. The second parcel (which contained 172,389 sq. ft., or 3.96 Acres) was known, inter partes , as the 'Business Area'. The deed of conveyance for said parcel was recorded on June 13, 1956, in Book 2679 of Deeds for Hudson County, at page 49, etc.
A copy of said deed shall be received in evidence as Ex. 3.
4. On June 11, 1956, Developers, by letter of even date, requested Agency's permission to reconvey the Business Area to Urban Commercial Inc. (hereinafter called 'Commercial').
A copy of said letter shall be received in evidence as Ex. 4, it being hereby agreed and stipulated that said letter was authorized to be written by proper corporate action and authority.
4A. On June 11, 1956, Commercial, by letter of even date, informed Agency of its intention to take title to the Business Area; that it was aware of the terms of the contract, Ex. 1, and that it assumed all of the obligations therein set forth.
A copy of said letter shall be received in evidence as Ex. 5, it being hereby agreed and stipulated that said letter was authorized to be written by proper corporate action and authority.
4B. On June 11, 1956, Agency, upon receipt of Exhibits 4 and 5, consented to the transfer of the Business Area from Developers to Commercial, and its consent is evidenced by a resolution of Agency incorporated in Agency's minutes of a special meeting held on June 11, 1956.
A copy of said minutes, in their entirety, shall be received in evidence as Ex. 6 as evidence of Agency's formal action on June 11,
1956, with relation to its transactions of that day concerning the Project Area.
4C. On June 11, 1956, Developers, pursuant to Agency's consent, as above set forth, by deed of even date, did reconvey the Business Area to Commercial, by deed recorded on June 13, 1956, in Book 2679 of Deeds for Hudson County, at page 53, etc.
A copy of said deed shall be received in evidence as Ex. 7.
5. On June 11, 1956, Commercial executed and delivered a mortgage note covering the Business Area, in the face amount of $450,000., 'or so much thereof as may be advanced,' to Isadore Feldman (the plaintiff herein), which mortgage note was secured by a mortgage of even date. The mortgage was recorded on June 13, 1956 in Book 2431 of Mortgages for Hudson County, at page 157, etc.
The originals of said mortgage note and mortgage shall be received in evidence as Exs. 8 and 9, respectively, it being hereby agreed and stipulated that said mortgage note and mortgage were authorized to be executed and delivered by proper corporate action and authority.
5A. Agency did not give its formal prior written consent to the making of plaintiff's mortgage.
6. On June 11, 1956, plaintiff had actually advanced, on account of the principal sum of the mortgage note and mortgage, the sum of $250,000. The amount so advanced is evidenced by a check for $250,000., drawn on the account of Feldman and Farmer Special, to the order of Isadore Feldman, which check was endorsed over to, and received by, Agency (together with an additional sum of $62.20) as the consideration for the conveyances of Section I and the Business Area as hereinabove recited in Pars. 3, 3A and 3B.
Said check shall be received in evidence as Ex. 10.
7. Thereafter, plaintiff made additional advances on account of the principal sum of mortgage note and mortgage as follows: