For reversal -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Francis, J.
On November 20, 1959 plaintiff Stehr and defendants Alton L. and Helen Sawyer, husband and wife, executed a contract for the purchase by the former and sale by the latter of three tracts of land in the Township of Byram, Sussex County, New Jersey. The price agreed upon was $18,000. During the ensuing months considerable correspondence took place between the parties about the sufficiency of defendants' title to the third tract. On March 29, 1960 defendants' attorney wrote plaintiff's attorney admitting the title to that tract was unmarketable and suggesting that the Sawyers would return the down payment, interest and reasonable search fees. Nothing came of this proposal and on May 3, 1960 defendants notified plaintiff's attorney in writing that the closing would take place and the deed would be tendered at his office on May 21, 1960 at 10:00 A.M. The letter made time of the essence and recited also that if plaintiff rejected the deed on that day, defendants would return the down payment plus interest and reasonable search fees.
The parties and their attorneys appeared at the time and place fixed. Defendants tendered a deed for the three tracts as described in the contract. Plaintiff refused the deed on the ground that defendants' title to the third tract was unmarketable. Defendants conceded that to be the fact and
presented a check to plaintiff for $2,000 representing his down payment, interest and reasonable expenses. The offer was refused. Plaintiff then offered to accept the deed with an abatement of $7,000 in the purchase price. Defendants' attorney suggested an abatement of $500. An impasse resulted.
About a month later, defendants found another purchaser who agreed to pay a sum in excess of $18,000 for the same three tracts, although he was aware of the title problem and the preexisting Stehr contract.
Shortly thereafter, plaintiff instituted this action in which he sought a judgment compelling specific performance, with abatement, of defendants' contract with him. In the pretrial order plaintiff claimed "specific performance as to two of the tracts of land and an abatement of the purchase price to the one to which defendants do not have good title." He asserted also that he would accept a deed to all three tracts and pay the full purchase price if defendants could furnish proper title to the third tract. In addition, he sought damages for the expenses suffered in studying defendants' title to the latter tract. In paragraph 7 of the order where the issues to be determined at trial are required to be stated, the following appears:
"(d) Whether plaintiffs are [ sic ] entitled to specific performance with abatement of part of the purchase price." (See Form 29, par. 7).
At no time, by pleading or amendment to pretrial order, or before all the testimony had been taken at the trial, did plaintiff offer to take, or in any way indicate a willingness to take, title without abatement in the purchase price.
At the close of the trial, summations on the facts and the law were made. Defendants' argument was made first and concerned itself with the contentions that under the facts and circumstances proved, equity should deny relief altogether, and that in any event the relief sought by plaintiff, i.e., specific performance with abatement, should be denied. In
the course of his summation, plaintiff said for the first time that "he is entitled to the remedy of specific performance either with or without abatement."
The trial court, in an oral opinion, declined to grant specific performance with or without abatement. He found that plaintiff knew the title to the third tract was unmarketable. He found further that with such knowledge, and apparently with a willingness to take his chances, plaintiff had the contract prepared, took it to Virginia where the Sawyers then resided and where, after a conference, it was signed. The judge concluded that the Sawyers, whose truthfulness impressed him, had reservations at the time about the sufficiency of the third tract title, and that Stehr was aware of those reservations. Finally, and of considerable ...