Kolovsky, Lynch and Allcorn. The opinion of the court was delivered by Kolovsky, P.J.A.D.
In this action by a vendor of real property against a vendee who allegedly wrongfully refused to consummate the purchase, the trial judge found in favor of plaintiffs, awarding them damages of $20,800 and directing cancellation of a mortgage given by the individual plaintiffs to defendants to secure return of the purchasers' deposit if they should become entitled to have it returned. Defendants' counterclaim seeking return of the $17,000 deposit made by them was rejected. Defendants appealed.
When the appeal was first before us we remanded the case to the trial court for additional testimony, findings and conclusions. Docket A-304-72. After those proceedings had been concluded supplemental briefs were filed and the appeal reargued.
Many of the controlling facts are uncontradicted. Under date of June 3, 1966 plaintiff Thomas F. Ruane contracted to purchase a tract of land in Ridgewood from sellers named Howard for $125,000. The purchase was contingent upon the purchaser obtaining a zoning variance permitting use of the premises for garden apartments, which the purchaser was to apply for. $100 was deposited at the time of the execution of the contract with an additional $12,400 to be paid when the time to appeal from any variance obtained had expired. The balance of $112,500 was to be paid 60 days thereafter. Thomas F. Ruane thereafter assigned his rights under the contract to plaintiff Thomas F. Ruane Development Corporation.
More than two years later, under date of December 6, 1968, plaintiff corporation entered into a contract to sell the
premises to defendants, partners trading as Landmark Development Company. The contract provided that the sale was of a "package transaction," with the seller obligated "to pay for and furnish to purchaser, prior to closing, all required permits, plans [drawn with the approval of the purchaser as to design and layout], tenement house approval, and surveys, including boundary survey." Consummation of the transaction was made conditional on a number of contingencies, including the required zoning change referred to in the Howard contract and the purchaser's obtaining a mortgage commitment.
It is conceded that under the formula provided in the contract the total purchase price was $175,000. Defendants made an initial deposit of $10,000 on account and thereafter, pursuant to a modification agreement which, among other things, eliminated the mortgage contingency provision, made additional payments totalling $7,000 in January or February 1970.
Eventually Ridgewood amended its zoning ordinance to permit the property to be used for garden apartments, and the required surveys, building plans and specifications were prepared. Plaintiff served a time of the essence notice, dated May 28, 1970, fixing June 12, 1970 at 2 P.M. as the time for closing. After a question was raised as to the alleged failure of plaintiff to procure a building permit, that permit was obtained and plaintiffs, by letter dated June 22, 1970, advised defendants that
Defendants, who were unable to arrange financing, failed to appear on July 8, 1970 at the time and place for closing.
Plaintiffs then instituted this action, asserting in the pretrial order entered on July 29, 1971, that as a result of defendants' default, plaintiff corporation "was compelled to sell said property for the sum of $125,000 representing a loss of bargain in the sum of $50,000 reflected in the difference of the purchase price agreed to be paid by plaintiff and the contract price to be paid by defendants to the plaintiff."
That assertion was far from candid. As defendants ascertained after the date of the original pretrial conference, the fact was that on March 12, 1970 plaintiff-corporation, in order to raise funds to make the $12,400 payment called for under the Howard contract once zoning approval had been obtained, borrowed $12,500 from one George E. Maloof, giving the lender a promissory note of $15,000, payable on June 5, 1970, secured by an assignment both of plaintiff's rights as purchaser under the Howard contract and as seller ...