This matter comes before the court on motion by defendant Central Jersey Bank and Trust Company seeking an order dismissing plaintiffs' complaint for failure to state a claim upon which relief can be granted. Plaintiffs filed a cross-motion for summary judgment setting aside the sheriff's sale on the grounds that execution was not made on plaintiffs' personalty prior to execution on the realty in question.
In April 1975 plaintiffs' daughter Kathleen Dunay, as borrower, executed and delivered to defendant Central Jersey Bank and Trust Company a promissory note in the face amount of $4,536. Plaintiffs executed the note as comakers. Ms. Dunay made payments against the note, reducing it to approximately $1,144 before defaulting on her obligation. On January 13, 1977 Central Jersey Bank and Trust Company instituted an action on the note against Kathleen Dunay, Tony Raniere and Margaret Raniere in Monmouth County District Court. Judgment in the sum of $1,370.33 was entered against those defendants on February 17, 1977, and docketed in the Superior Court on February 24, 1977, under docket number D.J. 18448-76.
By letter dated Friday, March 4, 1977, former counsel for the Central Jersey Bank and Trust Company forwarded to the Monmouth County Sheriff's Office the following communication:
Enclosed please find original and three copies of Writ of Execution, together with metes and bounds description of premises owned by the defendants Tony Edward Raniere and Margaret Raniere. Please have the Deputy levy on the real estate, and advise.
The writ was received by the Monmouth County Sheriff's Office in Freehold, New Jersey, at 10:39 A.M. on Monday, March 7, 1977. It contained the standard language commanding the sheriff to:
However, the return writ indicates that at 11:15 A.M. on the very same day the deputy sheriff levied upon certain land and premises owned by plaintiffs, Tony and Margaret Raniere, and commonly known as 12 Elizabeth Parkway, Eatontown, New Jersey. By letter dated Monday, March 7, 1977, the sheriff's office advised the bank's attorney that "a levy was made on the realty in accordance with description furnished this office."
The execution sale, originally scheduled for May 9, 1977, was adjourned to May 23, 1977, at which time the subject premises were purchased by Lawrence Ariando with a bid of $1,410.07. The total sum due the Central Jersey Bank, together with interest and costs, amounted to $1,410.07. The premises were assessed at $40,000 and were subject to an $8,000 mortgage and a financing statement in the sum of $1,915.60. The successful bid was assigned to defendant I&M Investments Inc., which paid off existing liens and placed a $23,400 mortgage on the premises in favor of defendant Colonial Mortgage Service Company.
On August 15, 1977 plaintiffs filed a verified complaint seeking to restrain defendant I&M from taking possession of or conveying the subject premises. Plaintiffs allege that they were never served with the summons and complaint in the county district court action and had no knowledge of any proceedings against them until shortly before July 21, 1977, when they were notified by their former mortgagee that its mortgage had been paid off by a third party. Plaintiffs therefore demand judgment setting aside the sheriff's sale and vacating the Superior Court and District Court judgments entered against them. Defendant Central Jersey Bank and
Trust Company moves to dismiss the complaint for failure to state a cause of action against it. For the reasons that follow, the court denies defendant's motion and enters summary judgment in favor of plaintiffs, vacating the May 23, 1977 sheriff's sale.
At common law real property was not subject to execution. Alt v. Kwiatek , 128 N.J. Eq. 469, 471 (Ch. 1941); Voorhees v. Chaffers , 24 N.J.L. 507, 509 (Sup. Ct. 1854). In 1743 the General Assembly of the Province of New Jersey made real estate chargeable with debts and liable to be sold for their satisfaction, and authorized the issuance of executions commanding the sheriff to make sale of the land for that purpose. Neville's Laws , 279-81; Voorhees v. Chaffers, supra; Ackerson & Fulop , 20 N.J. Practice § 1889 (1973). The Legislature of the State of New Jersey enacted a statute in 1799 making real estate subject to execution for debts, "coupled with the condition, however, which we find in our system, providing for the exhaustion of the personalty prior to the sale of the land." Bulat v. Londrigan , 63 N.J. Eq. 22, 27 (Ch. 1902), aff'd o.b. 65 N.J. Eq. 718 (E. & A. 1903); Palladino v. Hilpert , 72 N.J. Eq. 270, 275 (Ch. 1906).
In 1846 the act was amended to require that in every writ of execution against real estate the sheriff shall be commanded to satisfy the debt out of the goods and chattels located within his county, and if sufficient personalty cannot be located within the county, he may proceed against the lands of the debtor. The act further provided that the judgment debtor had the right to require the sheriff to sell his real estate before selling his goods and chattels. Rev. Stat. of 1846, at 660. The obvious reason was that in some instances it would work a greater hardship on the debtor to have his personalty and implements of ...