On appeal from Superior Court, Chancery Division, Monmouth County.
Lynch, Kole and Petrella.
Plaintiff obtained a judgment in the Chancery Division setting aside the deed to defendant under a sheriff's sale conveying title to defendant to satisfy a default judgment in another action.
The trial judge ruled that failure to provide notice of a sale of realty in accordance with R. 4:65-2 required voiding the sale. He considered, but did not rule on, whether the statute regarding executions on property of a judgment debtor required exhaustion of personalty prior to execution against real property. Defendant appeals.
On the trial date both parties sought judgment on crossmotions on essentially uncontroverted facts which included certain documentary evidence and deposition testimony of the first-named defendant herein, Alan C. Sugarman (hereinafter referred to as defendant), a New Jersey attorney. It is undisputed that the plaintiff had an outstanding bill of $347.90 which was owed to a New York hospital as the balance for 1971 services, and that defendant obtained a default judgment on August 15, 1974 on behalf of his client in a collection suit for that amount against the plaintiff
herein. Service in the collection suit had been effected by delivering a copy of summons and complaint to his wife on July 19, 1974.
On August 22, 1974 defendant sent plaintiff a letter advising him that execution proceedings would be instituted if payment of the judgment was not made and that this would "terminate in the sheriff holding a public sale of your home or other assets." Defendant obtained a writ of execution on January 28, 1975, directing that the sheriff satisfy the judgment first out of personal property in the county and then out of realty. The only inquiries made as to personalty owned by plaintiff were a request to a bank (which would give no information without the customer's written consent) and to the Division of Motor Vehicles. Upon determining that the home of the plaintiff in Deal, New Jersey, was in joint name with his wife, and concluding the personal property was likewise, defendant directed the sheriff to levy upon and conduct a sale of a parcel of vacant oceanfront land in Deal, New Jersey, held solely in the name of plaintiff. The recorded deed disclosed it had been purchased in February 1974 for $55,000.
At the sheriff's sale in April 1975 defendant bid in the property for $4,000 and took title in his own name. He transferred it for a stated consideration of $60,000 to defendant Wenscot Associates, Inc. (Wenscot), a corporation formed by him in May 1975 for that purpose.*fn1 It was conceded that any transfers involving Wenscot did not affect the rights of plaintiff.
Plaintiff had unsuccessfully moved to vacate the default judgment in the action in which he was defendant-judgment
debtor. After defendant commenced negotiations to sell the property to another party for $60,000 plaintiff instituted an action in the Chancery Division in August 1975 to set aside the sheriff's sale and to impose a constructive trust in his favor.
The judge ruled that because defendant had not sent plaintiff a ten-day notice of the sheriff's sale, as required by R. 4:65-2, that sale had to be voided. He also expressed the opinion that under the statute (N.J.S.A. 2A:17-1) personalty had to be exhausted before the levy could be made on realty. Plaintiff was ordered to pay the original ...