Campbell v. Heller

• Citation: 115 A.2d 644,36 N.J.Super. 361
• Decision Date: 15 June 1955
• Docket Number: No. C--509,C--509
• Parties: Jean CAMPBELL and Jack J. Campbell, Plaintiffs, v. Anna HELLER and Arthur Heller and Chelsea Title & Guaranty Co., a corporation of New Jersey, Defendants. . Chancery Division
• Court: Superior Court of New Jersey

Page 361

36 N.J.Super. 361

115 A.2d 644

Jean CAMPBELL and Jack J. Campbell, Plaintiffs, v. Anna HELLER and Arthur Heller and Chelsea Title & Guaranty

Co., a corporation of New Jersey, Defendants.

No. C--509.

Superior Court of New Jersey.

Chancery Division.

June 15, 1955.

Isaac C. Ginsburg, Atlantic City, for plaintiffs.

Daniel Bell, Jr., Atlantic City, for defendants (Kirkman, Mulligan & Harris, Atlantic City, attorneys).

HANEMAN, J.S.C.

Plaintiffs herein seek the specific performance of an agreement to purchase real estate. The defendants Heller seek the rescission of the contract.

The facts in connection herewith are as follows: On September 22, 1954 the plaintiffs and the defendants Heller entered into an agreement under the terms of which the said defendants agreed to purchase a specifically described parcel of real estate situate in the City of Ventnor City, County of Atlantic and State of New Jersey, also referred to in said agreement as the 'northerly portion of Lot 13 in Block 71-B, Ventnor City Tax Map.' The agreement called for final settlement and closing on October 22, 1954. On that date the parties attended at the office of the Chelsea Title & Guaranty Company of Atlantic City, New Jersey, by virtue of a prior arrangement to that effect. Plaintiffs thereupon presented their duly executed deed and delivered the same to the settlement clerk. The settlement clerk proceeded to compute the amount due from the defendants Heller and advised them of the balance of the purchase price so required to be paid. At that time the defendants Heller were represented by counsel, who examined the certificate of title and advised that a television aerial installed by the plaintiffs on the balance of Lot 13 in Block 71-B encroached on the land to be conveyed, and that electric wires for servicing the adjoining house were strung over said land and thus violated the covenants of the agreement. However, he then voiced no objection to a restrictive covenant which appeared thereon. The defendants Heller thereupon drew a check to the order of the Chelsea Title & Guaranty Company for the balance of the purchase price and delivered the same to the settlement clerk, with the advice from their counsel that it was not to be used until the plaintiffs had eliminated the television aerial and the electrical wires, and until the clerk heard further from said counsel. At the same time, counsel for the Hellers obtained a copy of the restriction referred to in the certificate of title as affecting the realty here involved. They did not then realize that a dwelling house could not be erected on the land involved under the terms of said restriction. At 3 o'clock in the afternoon of the same day the said Hellers stopped payment on their check and the Chelsea Title & Guaranty Company was advised that the said Hellers refused to make settlement. On the following day the plaintiffs received a letter from the Hellers' counsel advising that they 'have terminated the agreement of sale between yourself and them, dated September 22, 1954, because of the encroachment of the television pole antenna and the electric wires as shown on the survey.'

The Hellers, by way of defense, now assert not only the above two reasons, but as well that the restrictions in the chain of title prohibit the use and/or occupany of the premises as a single-family residence site.

The portions of the agreement of sale here material read as follows:

'2. Settlement is to take place at the office of any reputable title company of Atlantic City, N.J., on or before the 22nd day of October, 1954, at 11 o'clock A.M., which time is of the essence of this agreement, when the Seller shall deliver a special warranty deed for the said premises, and the balance of the purchase price is to be paid or secured as follows: The balance of the purchase price in the sum of Forty-nine Hundred ($4900.00) Dollars to be paid in cash at the time of final settlement. The above consideration is to be delivered to said title company to be disbursed after said title company has completed the necessary continuation search to cover the record date of said deed.

'3. In the event of the Buyer not making settlement in accordance with the terms hereof the payment of payments made on account shall, at the Seller's option, be forfeited as liquidated damages for the failure of the Buyer to settle; or be applied on account of the purchase price.

'4. The title to be delivered shall be a marketable title and insurable by said title company and shall be free and clear of all encumbrances including municipal liens and assessments and liability for assessments for improvements now constructed (except as herein stated), this clause to be operative as of the date of this agreement, and the title is to be subject to all existing restrictions of record, the seller, however, guarantees that there are no restrictions in any conveyance or plans of record affecting the said premises, which will prohibit the use and/or occupancy thereof as a single family residence site and the premises shall be conveyed in the same condition as the same now are, reasonable wear and tear excepted.'

The portion of the restriction admittedly affecting the lot reads as follows:

'That no more than one building shall be erected upon any lot upon said map, except that a private garage may be erected upon a lot upon which a dwelling house is also erected as hereinafter provided.'

The land conveyed was the northerly portion of Lot 13, Block 71-B. On the southerly portion of the lot here involved, a one-family dwelling house had theretofore been constructed.

Plaintiffs, by way of answer to the defense of the defendants Heller, assert that either (1) the contract between the plaintiffs and the Hellers was merged in the deed delivered to the Title Company and they cannot now be heard to complain of the existence of said restriction, or (2) the defendants Heller waived the above quoted provision of said contract relating to restrictions.

The agreement of sale calls for the delivery of a special warranty deed, which said deed was delivered by the plaintiffs to the Chelsea Title & Guaranty Company, as above noted. A special warranty deed has the same effect as if the grantor had covenanted against the claims and demands of said grantor and all persons claiming or to claim by, through or under him. N.J.S.A. 46:4--8. It must be plain that such a covenant is neither a general warranty nor a specific covenant against all encumbrances. The deed as delivered contained no warranty that 'there are no restrictions in any conveyance or plans of record affecting the said premises which will prohibit the use and/or occupancy thereof as a single family residence site.'

It is generally recognized that the acceptance of a deed for lands is to be deemed Prima facie full execution of an executory contract to convey, unless the contract contained a covenant collateral to the deed. Normally, to be deemed collateral and independent, covenants must not be connected with the title, possession, quantity or emblements of the land. The rule that the acceptance of a deed for land is to be deemed Prima facie full execution of an executory contract to convey, and extinguishes and satisfies all previous covenants which relate to or are connected with the title, possession, quantity or emblements of the land does not apply to collateral covenants in the antecedent contract which are not intended by the parties to be incorporated in the deed or which are not necessarily performed or satisfied by the execution and delivery of the deed. Until consummated, however, an executory contract is subject to modification. In all cases, a deed, when accepted, is presumed to express the ultimate intent of the parties with regard to so much of the contract as it purports to execute. The executed contract supersedes all prior negotiations...