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Looman Realty Corp. v. Broad Street National Bank of Trenton

Decided: April 19, 1962.


Goldmann, Foley and Barrett. The opinion of the court was delivered by Foley, J.A.D.


[74 NJSuper Page 74] Looman Realty Corporation, and Louis Graff and Emanuel Lerman, appeal from the dismissal of consolidated actions against defendant Broad Street National Bank of Trenton and intervening defendant Green Rose Associates, Inc., at the conclusion of a plenary hearing. The action was for specific performance of an alleged contract

to sell the Broad Street Bank building on East State Street, Trenton, or, in the alternative, for damages for breach thereof. Defendant bank contended that the negotiations for a contract of sale to plaintiffs had never been completed and that the property in question has been sold to the intervening defendant.

A prior appeal culminated in the remanding of the case for trial. Looman Realty Corp. v. Broad Street Nat. Bank of Trenton , 32 N.J. 461 (1960). The issues on which a plenary trial was ordered were:

"[W]hether the transaction had become sufficiently definite or yet remained in the preliminary negotiation phase, whether the existence of a binding contract was intended to rest upon the execution of a formal contract of sale, whether the defendant actually accepted the alleged offer or whether the acceptance, if actually made, was ever sufficiently communicated to plaintiff." 32 N.J. , at p. 475.

The import of the opinion of the trial court rendered on the remand is that the alleged offer and acceptance were in fact but parts of the preliminary negotiations, and consequently a binding contract between the parties did not come into existence.

Plaintiffs urge four grounds of error: (1) Green Rose Associates was improperly allowed to intervene; (2) a contract for the sale of the property by the bank to Green Rose Associates was erroneously admitted in evidence; (3) plaintiffs proved a binding contract on which specific performance should have been granted; and (4) even if the contract was not certain enough to be enforced specifically, it was sufficiently certain in its terms to entitle plaintiff to an award of damages for its breach.

Briefly, the facts show that negotiations to purchase the bank building covered some four months and that the bank's board of directors had considered three offers (with different terms) of $1,600,000 for the building. The first offer was made by one Robilotto, a real estate broker, on December 27, 1958. No action was taken on this offer, and it expired by its own terms on January 7, 1959. On January 5, 1959

one Charles Schragger, a real estate broker and a member of the bank's board of directors, approached plaintiffs Graff and Lerman who, either individually or through companies they controlled, owned property adjoining the bank building. By letter of January 6, 1959 plaintiffs were informed by Schragger, in his capacity as broker, of the terms that the bank's building committee had decided to recommend to the board of directors. This letter contained the postscript:

"P.S. I am sure that based on your own past experiences with banks that you will understand that the above proposition is subject to the approval of the entire Board of the Bank."

An income and expense statement was also sent to plaintiffs at that time. On the afternoon of January 6 plaintiffs met with a few of the directors of the bank and some of the terms of the purchase were discussed. On January 9, 1959 plaintiffs gave Schragger a check for $10,000 to be enclosed with the formal offer. On January 12 the board met and appointed a three-man committee, consisting of board members Fell (president of the bank), Volpe and Williams, to negotiate for the sale of the building. On January 14 a letter, signed by Schragger as president of his real estate company and approved by Graff and Lerman, was sent to the bank. This is the offer upon which plaintiffs rely. The offer covers the price ($1,600,000), down-payment, financing, deposit, lease-back, parking area rent, heat and electricity, rental of the roof sign, installation of new elevators, modernization of lobby, cost of title policy and search, and date of expiration of the offer. This latter term noted that the offer was "subject to acceptance by Monday, January 19, 1959," and was confirmed by a telegram sent on January 17, 1959 to Schragger. Many of the terms were referred to only in a general way.

On January 16, 1959 the committee met to consider the offer, but no action was taken. On January 19, 1959, and before the bank board met, tentative approval was given to

plaintiffs' offer by the committee. At the board meeting the following action was taken (as it appears in the minutes of the board):

"Upon motion duly made, seconded and carried, approval was given to the recommendation of the committee, consisting of Messrs. Fell, Volpe and Williams, that we accept the offer to purchase the Bank building at 143-147 E. State Street, substantially upon the terms and conditions contained in the letter of Chas N. Schragger, Inc. dated January 14, 1959, addressed to Mr. Scott M. Fell, President. It is further recommended that acceptance of the terms are [ sic ] subject to the execution of a formal contract to include miscellaneous details to be agreed upon by the parties."

There was a factual dispute whether news of this action was communicated to plaintiffs on the 19th or 20th of January, by either Charles Schragger or his brother Edward. The trial court found as a fact that Edward made the call for his brother on the 20th, and that this call was made without the authorization of the board, but rather as a broker informing his client.

On January 21, 1959 the offer from Green Rose Associates was received, and at the January 26 meeting of the board it was noted that debatable questions had arisen concerning the status of plaintiffs' offer. The matter was referred to the bank's counsel, who on February 2, 1959 issued an opinion letter informing the board that it was not bound by any prior action taken and that it could still consider further offers. At the February 2, 1959 bank board meeting the committee recommended acceptance of the Green Rose offer, and this recommendation was adopted unanimously, provided no further offers were received by February 3, 1959. On February 4, 1959 a newspaper article appeared in a local paper, the Trentonian , noting the announcement of the proposed sale. When plaintiffs saw this article, and ...

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