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Juliano & Sons Enterprises Inc. v. Chevron

Decided: July 19, 1991.


On appeal from Superior Court, Chancery Division, Burlington County.

King, R.s. Cohen and Stern. The opinion of the court was delivered by Stern, J.A.D.


[250 NJSuper Page 149] We are asked to decide whether the common-law rule against perpetuities applies to nondonative commercial transfers. Our consideration of the issue is facilitated by the recent enactment in New Jersey, with some modifications, of the Uniform Statutory Rule Against Perpetuities of the National Conference of Commissioners on Uniform State Laws. See L. 1991, c. 192 enacted on July 3, 1991 (the Act). As the Uniform Act has now been adopted in this State, we view the principal issue to be the impact of the Act's exception for "[a] nonvested property interest . . . arising out of a nondonative transfer", as provided in Section 4. Specifically, we must decide whether nondonative transfers excepted from the Act nevertheless remain subject to the common-law rule, and, if not, the impact of the statute's provisions regarding effective date.

We hold that the Uniform Statutory Rule Against Perpetuities as adopted in New Jersey abolishes the common law and embodies the State's entire law on the rule. We further conclude that, while the statute is not retroactive and applies only to property interests "created on or after the effective date of th[e] act", Section 5, the nondonative commercial transaction for consideration executed before the Act's effective date in this case is no longer subject to the common-law rule against perpetuities. Therefore, with respect to the case before us, we reverse the trial judge's determination that the plaintiff's right of first refusal is void under the rule against perpetuities and remand for further proceedings.


For purposes of reviewing the grant of summary judgment in favor of defendants, we must view the facts in the light most favorable to plaintiff.

Plaintiff is a "small family-owned company" which owns property on Route 73 in Mt. Laurel. Plaintiff operates a motor lodge hotel on that location. Defendant Gulf Oil Corporation owns an adjacent piece of property on which it operates a gasoline station. In 1974 plaintiff and Gulf entered into a series of real estate transactions. By agreement dated February 13, 1974, defendant conveyed a parcel of land to plaintiff.*fn1 On November 5, 1974, plaintiff and Gulf executed an agreement in which plaintiff granted Gulf a sewer and water easement across plaintiff's property in exchange for which Gulf granted plaintiff a "right of first refusal" to buy the service station property. The agreement provides that Gulf "hereby bargains, sells and grants to [plaintiff] the right of first refusal to purchase certain lands of [Gulf] which are more particularly described in Schedule A" and that:

1. In the event [Gulf] shall at any time hereafter receive a bona fide offer for the purchase of the aforesaid remaining lands and premises owned by [Gulf] and on which lands and premises a Gulf service station is presently being operated, and such offer to purchase is acceptable to [Gulf], [plaintiff], its successors or assigns, shall have the option to purchase said lands and premises from [Gulf] on the same terms and conditions contained in said bona fide offer.

Both parties were represented by counsel with respect to the transactions.

In 1974, defendant Chevron U.S.A. acquired Gulf.*fn2 Thereafter, Chevron put several Gulf properties, including the service station involved in this case, up for bid. Cumberland Farms Inc. bid on Chevron's marketing assets in the Northeast, including the subject property, and Chevron accepted the bid.*fn3 On December 19, 1985, Chevron and Cumberland signed an "Asset Purchase Agreement" covering virtually all of Chevron's Northeastern assets. After learning the plaintiff would not waive its right of first refusal, Chevron and Cumberland Farms signed a letter agreement removing the subject property from the "Asset Purchase Agreement" and leasing the property for a 30-year term. The agreement further provided that "upon receipt of a written waiver" by plaintiff "of its right of first refusal to purchase the Premises" Chevron would convey the parcel to Cumberland for $100,000.

Thereafter, plaintiff commenced this suit seeking specific performance of its right of first refusal. While admitting that Gulf entered into the contract granting a right of first refusal,

Chevron denies that plaintiff has a right to ...

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