Conford, Kilkenny and Leonard. The opinion of the court was delivered by Leonard, J.A.D.
Defendants appeal from an adverse judgment entered against them in plaintiff's action for slander of title and upon defendants' counterclaim for specific performance.
The trial court, at the conclusion of all of the testimony, denied defendants' motion for a dismissal of plaintiff's action but granted plaintiff's motion for a direction of verdict in its favor on the liability phase of the case. The Court thereupon, submitted to the jury solely the issue of damages and the jury returned a verdict in favor of plaintiff and against defendants for $665.33 compensatory damages and $5 punitive damages.
This action springs from a contract executed between the parties on January 7, 1966, wherein plaintiff agreed to sell and defendants agreed to buy certain vacant land and a house to be constructed thereon by plaintiff. The total contract price was $23,500, to be paid as follows: $100 down; $400 cash and a $1,500 promissory note, when defendants obtained a $16,000 mortgage commitment; and the balance of $5,500 in cash and the mortgage money at the closing.
By an addendum to the contract the parties agreed that the mortgage loan "shall be obtained from City Federal Savings and Loan Association only" (City Federal), the company from which plaintiff had obtained a construction mortgage.
By letter dated January 27, 1966 City Federal advised defendants that their application for a mortgage loan had been approved and that attorneys Adams and Rockoff would "prepare our required documents and furnish us with title insurance." Defendant Lawrence Moran remonstrated with Englemann, president of plaintiff, over the mortgagee's designation of its closing attorney, taking the position that Foley, defendants' attorney in the transaction, who was also on a list of approved closing attorneys of City Federal, should so act. Englemann said the designation could not be changed and, according to Moran, said there was "no deal." Englemann
testified he had his discussions on this subject with Foley and that the latter was adamant about being the closing attorney for the mortgagee, even after Englemann inquired of City Federal whether that arrangement satisfied it and received and transmitted a negative response. The Morans also refused to make the cash payment or deliver the $1,500 note.
On February 16, 1966 Adams and Rockoff, attorneys for the mortgagee, wrote to defendants that in view of their failure to make payment of the cash deposit and execute the promissory note, the agreement was rescinded by the seller. Coincidentally, the Morans recorded their contract with plaintiff in the county clerk's office on the very same date -- February 16, 1966. Defendant Lawrence Moran on February 22, 1966 wrote to City Federal that defendants accepted the commitment "except that the attorney who is to prepare the necessary documents and title insurance is your approved attorney, Francis C. Foley," purportedly in accord with an original understanding between defendants and Englemann to that effect. This controversy as to the attorney was never resolved, both parties holding steadfast to their respective positions.
On February 22 plaintiff wrote to defendants, returning their $100 deposit check and stating that "[W]e regret that you were unable to complete the purchase of the property * * *." On March 4 defendants' attorney, Foley, by letter sent defendants' deposit check to Adams and Rockoff, advising them that defendants had no intention of cancelling their contract and that he was holding the balance of the deposit for the seller and "will deliver the same when the controversy with respect to your representation of Mr. Moran is disposed of." In the same letter Foley stated that the contract between plaintiff and defendants was recorded on February 16.
Thereupon, plaintiff instituted the present action for slander of title, seeking compensatory and punitive damages and the removal of the contract from record. The basis of plaintiff's claim, as disclosed by the pretrial order, was
that defendants "willfully, wantonly, maliciously and with the intention to damage plaintiff, recorded the contract" and ...