On certification to the Superior Court, Appellate Division.
For reversal and remandment -- Chief Justice Hughes and Justices Mountain, Pashman, Clifford, Schreiber and Handler. For affirmance -- None. The opinion of the court was delivered by Mountain, J.
[76 NJ Page 470] Plaintiffs contracted to sell and convey to defendants a residential property in Ridgewood. The purchasers refused to consummate the sale, alleging defects
in title and misrepresentations on the part of the sellers. Plaintiffs instituted an action for specific performance; defendants counterclaimed for rescission. Before the trial commenced, plaintiffs abandoned their claim for specific performance, and the case proceeded solely as an action on the counterclaim of the defendants-purchasers, seeking rescission, in effect to secure the return of the down payment.
At the conclusion of the purchasers' case, the court granted the sellers' motion for judgment. The purchasers appealed, and the Appellate Division, in an unreported opinion, reversed the judgment of the trial court. Instead of remanding for a new trial, however, the Appellate Division ordered that judgment be entered in favor of the purchasers. The sellers moved for a rehearing. They pointed out that since the trial court had granted their motion for judgment at the conclusion of the purchasers' case, they had had no opportunity to present a defense to the purchasers' rescission claim. The Appellate Division denied the motion for a rehearing, adhering to its position that the purchasers were entitled to judgment. Although we agree with the Appellate Division that the trial court erred in granting vendors' motion, we think its entry of judgment in purchasers' favor to have been clearly erroneous. There must be a new trial.
The reversal by the Appellate Division was in effect a ruling that the trial court had erred in failing to deny the sellers' motion. Had the trial judge, rather than the Appellate Division, denied the motion, the sellers unquestionably could then have offered evidence to support their position. The relevant rule of court reads, in pertinent part:
A motion for judgment, stating specifically the grounds therefor, may be made by a party either at the close of all the evidence or at the close of the evidence offered by an opponent. If the motion is made prior to the close of all the evidence and is denied, the moving party may then offer evidence without having reserved the right to do so.
[ R. 4:40-1; emphasis added]
The vendors cannot be denied this right simply because the adverse ruling emanated from an appellate court rather than the trial court.
Since there must be a new trial, it may be helpful for us to comment upon certain statements and contentions appearing in the opinions filed below as well as in the briefs. Because the sellers have had no opportunity to present their case, some of the facts we here assume necessarily rest upon inference if not conjecture.
It would appear that the validity of the title to a portion of the premises in question is sought to be sustained by the sellers upon a claim of adverse possession. The purchasers take the position that this being so, they were justified in repudiating the agreement; that the sellers could not force such a title upon them, but should have perfected the record title prior to the date of closing. This, they add, should have been done either by securing a deed from the present record title holder, or by means of an action to quiet title. While we readily concede that the sellers would have been well advised to have followed such a course, we do not agree that their failure to do so imperiled their position to the extent urged by the purchasers.
When a prospective seller's title is grounded upon adverse possession, or contains some apparent flaw of record, he has a choice of options. He may at once take whatever steps are necessary to perfect the record title, including resort to an action to quiet title, an action to cancel an outstanding encumbrance, or whatever other appropriate step may be necessary to accomplish the purpose. In the alternative he may, believing his title to be marketable despite the fact that it rests on adverse possession or is otherwise imperfect of record, choose to enter into a contract of sale, hoping to convince the purchaser or, if necessary, a court, that his estimate of the marketability of his title is ...