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Thomas v. Sun Realty Inc.

Decided: April 7, 1978.

EDWARD THOMAS AND CAROL THOMAS, PLAINTIFFS-RESPONDENTS,
v.
SUN REALTY, INC., DEFENDANT, AND STEPHEN BROWER AND CHRISTINE BROWER, HIS WIFE, DEFENDANTS AND THIRD PARTY PLAINTIFFS-RESPONDENTS, V. TITLE INSURANCE COMPANY OF MINNESOTA, THIRD PARTY DEFENDANT-APPELLANT



On appeal from Superior Court, Law Division, Ocean County.

Fritz, Botter and Ard. The opinion of the court was delivered by Botter, J.A.D.

Botter

This appeal raises the question of the effect of bankruptcy proceedings upon the marketability of title derived from a predecessor in title, Anna M. Schucht, who apparently acquired an interest in the subject property between the time she filed a petition in bankruptcy and the date of discharge from bankruptcy.

Plaintiffs Mr. and Mrs. Thomas (the Thomases), brought this action to recover a deposit of $3,300 held in escrow by Sun Realty, Inc. pursuant to an August 20, 1975 contract for the sale of premises owned by defendants Mr. and Mrs. Brower (the Browers). The complaint alleged that the sellers, the Browers, could not convey marketable title because of the cloud on title due to the bankruptcy of Mrs. Schucht. The buyers were willing to postpone the closing from November 15, 1975 to January 15, 1976, when their mortgage commitment would expire, to give the sellers the opportunity to clear the alleged cloud and the title. Before the new closing date, however, the sellers moved back into their house and requested a further postponement of the closing until the Spring of 1976. The Thomases would not agree to this and demanded the return of their deposit.

When plaintiffs sued defendants for the deposit the Browers, in turn, filed a third-party complaint against appellant Minnesota Title, the title company which had insured the Browers' title against unmarketability. Motions for summary judgment were granted in favor of plaintiffs for the return of their deposit and in favor of third-party plaintiffs, the Browers, against Minnesota Title. Minnesota Title appealed and the Browers filed a cross-appeal to challenge the judgment in favor of the Thomases. However, the cross-appeal against the Thomases is deemed abandoned by virtue of the Browers' contention that their title was unmarketable, a contention that sustains plaintiff's claim. More significantly, the brief filed for the Browers does not advance any ground for reversing the judgment in favor of plaintiffs;

it seeks only an affirmance of the judgment against the title company.*fn1

The entire controversy involves the significance of bankruptcy proceedings filed by Anna M. Schucht, who, with her husband Paul J. Schucht, conveyed the property to the Browers. The pertinent dates and transactions shown in the record before us are as follows:

8-13-63 Filing date of the petition in bankruptcy for Anna M.

Schucht.

8-13-63 Anna M. Schucht adjudicated bankrupt.

10-3-63 Wilmat Corp. deed to Paul J. Schucht, recorded on

10-9-63. The deed incorrectly refers to ...


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