On appeal from Essex County Court, Probate Division, and Superior Court of New Jersey, Chancery Division, Essex County.
Allcorn, Morgan and Horn.
[172 NJSuper Page 100] This consolidated appeal concerning two final orders relating to the same piece of real property focuses on the effect, if any, of the titleholder's death on the proposed sale of real property levied upon pursuant to a writ of execution issued prior to death. The property, 43 Lloyd Road, Montclair, New Jersey, was owned by Alexander Eagleson. Eagleson died on February 5, 1978 and devised the Lloyd Road property to James T. St. John, one of the appellants in this case. At the time of Eagleson's death the property was encumbered by two mortgages and an executed judgment.
On August 22, 1975 Mills Nursing Home, Inc., obtained a judgment against Eagleson. This judgment was eventually assigned to Investors & Lenders, Ltd. On May 18, 1977, in a proceeding unrelated to the Mills Nursing Home action, the second mortgagee (American National Bank & Trust of New Jersey) filed a complaint against Eagleson seeking to foreclose its mortgage on the Lloyd Road property. On August 9, 1977 judgment in favor of American National Bank & Trust of New Jersey (ANB) was entered in the foreclosure action and the property was ordered sold.
Until December 27, 1977 both the Mills Nursing Home judgment and the ANB judgment of foreclosure were "dormant" in that neither had been acted upon. On December 28, 1977 Investors & Lenders, Ltd. (Investors), assignee of the Mills Nursing Home judgment, obtained and delivered a writ of execution to the Essex County Sheriff. On January 30, 1978, pursuant to this writ of execution, the Essex County Sheriff levied on the property and advertised that the property would be sold on March 21, 1978.
Thus, as of the date of Eagleson's death, February 5, 1978, the property was encumbered by (1) a primary mortgage held by Glen Ridge Savings; (2) a judgment of foreclosure on the ANB secondary mortgage (no foreclosure sale date had yet been set); and (3) Investor's judgment upon which execution had issued and which was set down for sale on March 21, 1978.
The March 21, 1978 execution sale was postponed once and held on May 16, 1978. Sharon and Shoichi Oki (Okis), respondents herein, purchased the property at the execution sale, subject to the primary mortgage and ANB's judgment of fore-closure.
Appellants (the Eagleson estate, executrix and devisee and residuary beneficiary, James T. St. John) sought to invalidate the May 16, 1978 execution sale on the ground that N.J.S.A. 2A:17-71 provided a six-month stay of the sale of all property of a decedent who has an unsatisfied judgment against him and on
the ground that they failed to receive adequate notice of the sale. The trial judge ruled that appellants had adequate notice and that the six-month stay provided by N.J.S.A. 2A:17-71 is triggered only when execution is sought after the death of the decedent. Because execution had issued prior to Eagleson's death, the trial judge ruled the May 16, 1978 sale and purchase valid.
Prior to this decision ANB believed that the six-month stay provided for in N.J.S.A. 2A:17-71 prohibited it from proceeding with a foreclosure sale based on its previously obtained judgment of foreclosure. When the trial judge rendered his decision on June 5, 1978 validating the execution sale, holding N.J.S.A. 2A:17-71 inapplicable, ANB immediately advised the sheriff's office to proceed with the foreclosure sale. The sale was held on June 6, 1978 and the purchaser at the foreclosure sale ultimately assigned his rights to the Okis for valuable consideration. The Okis learned of the foreclosure sale only after it had occurred and sought this assignment in order to protect their interest obtained at the May 16, 1978 execution sale.
Appellants next brought an action to invalidate the June 6, 1978 foreclosure sale on grounds of unclean hands, inadequacy of price and inadequate notice. The trial judge in this action confirmed the foreclosure sale on the grounds that as of May 16, 1978 the Okis obtained the only right that Eagleson could have devised to St. John -- the equity of redemption. Since appellants were divested of this right on May 16, 1978, they could not be prejudiced by the foreclosure sale on June 6, 1978. Only the Okis could be prejudiced by that sale, and they were seeking to have it confirmed.
In July 1978 the appeals from the two trial court judgments upholding the May 16, 1978 execution sale and the June 6, 1978 foreclosure sale were consolidated and it is this ...