The plaintiff seeks an adjudication of the interests of the respective litigants in and to a certain bond and mortgages. She is the executrix under the will of her late father, Stanley Pulek, and contends that he and his wife, defendant Isabella Pulek, held said securities as tenants in common. Defendant contends that they were joint tenants and upon Stanley's death she acquired the absolute interest in the same.
The late Stanley Pulek and the defendant, Isabella Pulek were married in May, 1952. Each had been previously married. He died on September 10, 1960. Prior to said marriage Stanley operated a tavern and restaurant known as Stanley's Anchor Inn at 105 Hawthorne Avenue, Newark, N.J. Upon their marriage the defendant took an active interest in the operation of the business which subsequently prospered. In November 1953 they acquired the stock interest in Peddie Realty Company, the corporation which owned the real estate upon which the business was conducted and which subsequently acquired an adjoining parcel. In 1955 the tavern license was issued in the names of Stanley and Isabella jointly and presumably they operated the business as partners. The Peddie Realty Company stock was equally distributed between the decedent and the defendant.
The marriage was a rocky one. On July 16, 1954 they entered into a separation agreement prepared by Michael L. Mango, who essentially was Mr. Pulek's attorney but on occasion represented both of them in connection with their marital affairs. The defendant returned to her husband in December 1954 and together they worked hard in the business.
In December 1959 decedent was anxious to sell the business and ultimately the defendant wife concurred. An agreement of sale was entered into dated December 8, 1959 with John Peterson and William Speros. This agreement provided for the sale of all the issued shares of stock of the Peddie Realty Company and all their right and title in the tavern and restaurant, including the liquor license, for the sum of $240,000. There was a down payment made of $40,000. Title was closed on January 5, 1960. Pursuant to the contract at the closing, the following instruments, the subject of this litigation, were delivered to the decedent and his wife:
(a) Bond -- Peddie Realty Company to Stanley Pulek and Isabella Pulek in the principal sum of $200,000 with interest at 5%, said principal and interest payable in monthly installments of $1,283.44 for a 21-year period.
(b) Real estate mortgage from Peddie Realty Company to Stanley Pulek and Isabella Pulek in the principal sum of $200,000, providing for the same monthly payments as prescribed in the bond.
(c) Chattel mortgage from Stanley's Anchor Inn Corp. to Stanley Pulek and Isabella Pulek covering the fixtures and equipment in the tavern and restaurant premises, likewise in the principal sum of $200,000 and providing for the same monthly payments.
Plaintiff contends that the decedent and his wife Isabella intended to create a tenancy in common, that a joint tenancy was never intended and consequently the instruments should be reformed so as to express the mutual intent of the parties. Plaintiff further asserts that assuming a joint tenancy was intended and established, the subsequent conduct of the parties effected a severance so that at the time of decedent's death, the parties were tenants in common in the subject bond and mortgages.
N.J.S.A. 46:2D-1 provides:
"When any mortgage, covering real estate or chattels or both, shall hereafter be made and executed to, or assigned to, any husband and wife, such mortgage shall be held by such husband and wife as joint tenants and not as tenants in common, both as to the legal estate and the beneficial interest or debt thereby secured, unless otherwise therein provided."
Clearly under the cited statute the securities were held by the decedent and his wife as joint tenants. Plaintiff asserts that there was a mutual mistake as to the legal consequences of the instruments. Mr. Mango testified that while he did not directly inquire from his clients (as he should have) as to what type of tenancy they desired to create, he gathered from their conduct and the surrounding circumstances that their intent was to hold the bond and two mortgages as tenants in common. He further testified that he was unaware of the cited statute at the time the instruments were drafted and executed, and that he intended to create a tenancy in common.
At the closing of title the Puleks requested the buyers to make out separate checks to each of them for one-half of the monthly payments. They did so for a brief period until the Puleks made other arrangements with the Bloomfield Savings Bank. Apparently Mr. Mango received some of the checks made payable to Mrs. Pulek, for he remitted a few monthly payments to her each in the sum of $641.72. On May 4, 1960 the Puleks entered into an agreement with the Bloomfield Savings Bank, whereby the bond and mortgages were delivered to the ...