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Mihranian Inc. v. Padula

Decided: June 17, 1975.

MIHRANIAN, INC., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
SAMUEL J. PADULA AND BOND AND MORTGAGE COMPANY OF NEW JERSEY, A CORPORATION OF THE STATE OF NEW JERSEY, AND VILLA MADRID, INC., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS-THIRD PARTY PLAINTIFFS-RESPONDENTS, V. JERSEY COAST SEARCH AND ABSTRACT COMPANY AND COMMONWEALTH LAND TITLE INSURANCE COMPANY, THIRD PARTY DEFENDANTS-RESPONDENTS



Halpern, Crahay and Ackerman. J. A. Ackerman, J.A.D.

Ackerman

[134 NJSuper Page 559] This appeal presents a question of some novelty with respect to enforcement of a vendee's lien.

The decision of the court below was based upon an oral stipulation of facts, formulated and agreed to by the parties on the scheduled date for hearing before the court. The salient facts may be summarized as follows:

On April 30, 1971 Samuel J. Padula, as vendor, and Mihranian, Inc., as vendee, entered into a written contract for the sale and purchase of certain land known as Section 2, Brookside Estates, in Dover Township, containing 39 prospective lots, and a deposit of $10,000 was paid by Mihranian. The contract provided that if Padula did not obtain subdivision approval for the 39 lots within six months, then, at Mihranian's option, the contract could be declared null and void, in which event the deposit would be returned and the rights of all parties cease. It further provided that Padula should be allowed to pay over the $10,000 received as the deposit to Bond and Mortgage Company of New Jersey, described as the "seller under a certain contract of sale entered into by Samuel J. Padula and Bankers Bond and Mortgage for the sale of the within premises". In fact, as known to Mihranian, Padula had not yet signed a formal contract with Bond and Mortgage to purchase the property and, at the time of the contract with Mihranian, Padula therefore had neither legal title to the premises nor equitable ownership thereof.

A week later, on May 5, 1971, Padula did enter into a contract with Bond and Mortgage for the purchase of the premises. Although it provided for the obtaining of subdivision approval by Bond and Mortgage, no time limit for securing the same was specified and the contract, unlike that between Padula and Mihranian, was not conditional. Bond and Mortgage received the $10,000 paid by Mihranian to Padula. It was stipulated that Bond and Mortgage did not then have actual knowledge of the contract between Padula and Mihranian or of the source of the deposit.

At about this time Mihranian, which apparently also signed a contract with Padula on or about April 30, 1971

for the purchase of Section 1, Brookside Estates, consisting of 15 prospective lots, signed an addendum thereto which provided that a $10,000 deposit made on the purchase of Section 1 should be deemed reallocated so that the down-payment on Section 1 should be only $5,000 and the remaining $5,000 should be considered an additional down-payment on the purchase of Section 2. The deposit on the latter contract was therefore increased from $10,000 to $15,000. There is no indication that this extra $5,000 was paid over to Bond and Mortgage.

Padula failed to get subdivision approval within six months. On November 3, 1971 Mihranian elected to terminate the contract and demanded the return of the $15,000 deposit, as it was entitled to do. On December 21, 1971 it commenced action in two counts against Padula and Bond and Mortgage for recovery of the deposit and establishment of a vendee's lien on the premises in question. Lis pendens was filed on December 28, 1971.

Legal title to the premises never became vested in Padula but it was conveyed to his assignee. Sometime after the institution of the above suit and the filing of the lis pendens, Padula assigned his rights under his contract with Bond and Mortgage to Villa Madrid, Inc. and there was a closing on this assignment on April 13, 1972. The consideration paid for the assignment is not set forth in the stipulation of the parties nor is a copy of the assignment reproduced in the appendix. On May 8, 1972 Villa Madrid closed with Bond and Mortgage, receiving a deed conveying to it legal title to the premises and, in connection therewith, it was given a $10,000 credit on the purchase price by Bond and Mortgage -- obviously because of the original deposit made by Padula from Mihranian's funds.

On or about July 14, 1972 Mihranian filed a supplemental complaint adding Villa Madrid as a party defendant to its action seeking return of its deposit and enforcement of a vendee's lien against the premises.

It seems clear from the stipulation and arguments of the parties that Villa Madrid did not have actual notice when it closed with Bond and Mortgage of Mihranian's claim for a vendee's lien or of the actual source of the deposit for which it received credit at closing. Both Bond and Mortgage and Villa Madrid filed third-party complaints against their title companies and the latter companies joined in the proceedings before the trial judge. Although those pleadings are not included in the record on appeal and the defenses and claims of the title companies are not ...


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