Casriel v. King

• Decision Date: 03 April 1948
• Docket Number: 147/711.
• Citation: 58 A.2d 269
• Parties: CASRIEL et al. v. KING et al.
• Court: New Jersey Court of Chancery

58 A.2d 269

CASRIEL et al.

v.KING et al.

147/711.

Court of Chancery of New Jersey.

April 3, 1948.

Suit by Lillian Casriel and Abe Casriel, her husband, and Frieda Spielfogel, against Lila W. King and Frank L. King, her husband, for specific performance of contract for purchase of real property, wherein the defendants filed a counterclaim for return of down payment and expenses of examination of title, etc.

Decree advised for complainants.

Syllabus by the Court.

1. It is the uniform rule in this state to decline to decree specific performance where reasonable doubt concerning the title exists, though rested on grounds merely debatable, but which might visit upon the purchaser litigation in that regard, and that too where, at law, the title might in fact be declared good.

2. A reasonable doubt is such as affects the value of the title, and would interfere with its sale to a reasonable purchaser and thus render the title unmarketable. The doubt must be real and not fanciful.

3. However, a title dependent on a fact must be regarded as marketable when (1) the fact is so conclusively proved in the suit for specific performance that a verdict against the existence of the fact would not be allowed to stand in a court of law, and (2) where there is no reasonable ground for apprehending that the same fact can not be, in like manner, proved, if necessary, at any time thereafter for the protection of the purchaser.

4. Where a similar covenant against the sale of liquor is contained in deeds from a common grantor, the only source of attack for the violation thereof, aside from the covenantee, is in other ownersgrantees, or their successors in title. And if the covenant has been abandoned and such abandonment acquiesced in by them and the covenantee, or if it has become ineffective for any other reason, the danger of attack from this source is fanciful and not real.

5. Where the conduct of defendant vendee was such as to lead the complainants to believe that the vendee had no objection to the restrictive covenant against the sale of liquor, and of which she had notice when the contract was executed, such conduct constitutes a waiver of such restriction and an estoppel against any possible right of rescission.

Ward Kremer, of Asbury Park, for complainants.

Milton M. Unger and Adrian M. Unger, both of Newark, for defendants.

BERRY, Vice Chancellor.

The prayer of the complainant's bill is that the defendant be decreed to specifically perform a contract in writing between the complainants, as vendors, and the defendant Lila W. King, as vendee, for the sale and purchase of property in the city of Asbury Park, New Jersey, known and designated as Lot No. 929 on a Map of Asbury Park made by F. H. Kennedy & Son, A.D. 1874, and on which is located a hotel known as the Asbury Ambassador. The lot is located on the north side of Third Avenue between Kingsley and Bergh Streets. The contract is dated February 1, 1947, and provides for a purchase price of $225,000, payable $10,000 upon the execution of the agreement; $40,000 upon settlement and delivery of deed, ‘on or before the 18th day of February’ following, and the balance of $175,000 to be secured by a bond and purchase money mortgage in that amount. The contract further provides that conveyance was to be made--

‘Subject to covenants, conditions and restrictions of record, which have not been violated.

‘Subject to state and municipal laws and requirements as to the use, location and constructions of the building and premises, which have not been violated.

‘Subject to such state of facts as may be disclosed by an accurate survey, provided said survey indicates that the buildings are all within the boundary lines.

‘It is further understood and agreed that any and all alcoholic beverages and other merchandise, used in connection with the operation of the bar, on the premises, is to be paid for by the party of the second part at the cost of the said merchandise and said payments shall be made at the time of the passing of title, in addition to the purchase price.

‘The parties of the first part agree, and it is of the essence of this agreement, that they will take all appropriate steps to effect a transfer to the party fo the second part of the Retail Liquor Consumption License presently covering the ground floor of the premises herein described and issued to Asbury Park Ambassador Corp.; and the party fo the second part agrees to do whatever may be necessary on her part of effect such a transfer; and in the event the transfer of said license is denied, then this agreement shall be null and void and the party of the second part shall be entitled forthwith to the return of any moneys paid by her under this contract. It is agreed that the closing of title shall not take place until the transfer of the license is approved by the appropriate municipal authorities.’

The contract was not closed on February 18th because the transfer of the liquor license had not been accomplished and settlement was postponed until March 11th, on which date the City Council was to act upon the application for transfer of said license, and it was agreed that settlement would be made on the afternoon of that day after the meeting of the City Council. But settlement was not then made, as following the hearing before the City Council the attorney for the defendant vendee served a notice on the complainants' attorney demanding the return of the $10,000 deposit ‘for the reason that an examination of the title discloses covenants, conditions and restrictions of record which have been violated contrary to the provisions of the said agreement between us.’

The bill of complaint was filed on March 19th, and Frank L. King, the defendant vendee's husband, was joined as a party defendant, the bill alleging that he was a necessary party. As he was not a party to the agreement of sale I do not consider him either a necessary or proper party, and the bill will be dismissed as to him.

The defendant vendee's defense to this bill is that complainants are unable to convey a good title in accordance with the terms of the agreement of sale, because of a restrictive covenant prohibiting the sale of intoxicating liquor on the premises; and this defendant counterclaims and demands the return of her down money and the expenses of examination of title, etc.

The defense resolves itself into the contention that by consummating the purchase of the property here involved the defendant vendee will be exposed to the hazard of litigation. Or, in other words, that she will be purchasing a law suit. Dobbs v. Norcross, 24 N.J.Eq. 327. The law touching this question is, I think, well settled.

It is the uniform rule in this state to decline to decree specific performance where reasonable doubt concerning the title exists, though rested on grounds merely debatable, but which might visit upon the purchaser litigation in that regard, and that too, where at law, the title might in fact be declared good. Van Riper v. Wickersham, 77 N.J.Eq. 232, 76 A. 1020, 30 L.R.A.,N.S., 25, Ann.Cas.1912A, 319; Saracino v. Kosower Construction Co., 102 N.J.Eq. 230, 140 A. 458, 57 A.L.R. 1241. In the Van Riper case the following cases are cited in support of the rule: Vreeland v. Blauvelt, 23 N.J.Eq. 483; Dobbs v. Norcross, supra; Tillotson v. Gesner, 33 N.J.Eq. 313; Cornell v. Andrew, 35 N.J.Eq. 7; Paulmier v. Howland, 49 N.J.Eq. 364, 24 A. 268; Lippincott v. Wikoff, 54 N.J.Eq. 107, 33 A. 305; Day v. Kingsland, 57 N.J.Eq. 134, 41 A. 99; See, also, Doutney v. Lambie, 78 N.J.Eq. 277, 78 A. 746; Simpson v. Klipstein, 89 N.J.Eq. 543, 105 A. 218; Richman v. Standard Oil Co., 95 N.J. Eq. 745, 123 A. 608; Breitman v. Jaehnal, 99 N.J.Eq. 243, 132 A. 291, affirmed 100 N.J.Eq. 559, 135 A. 915; Barger v. Gery, 64 N.J.Eq. 263, 53 A. 483; Zelman v. Kaufherr, 76 N.J.Eq. 52, 73 A. 1048; Elmore Development Co. v. Binder, 97 N.J.Eq. 126, 127 A. 693; Sharpe v. Stretch, 98 N.J.Eq. 225, 130 A. 231; Sulk v. Tumulty, 77 N.J.Eq. 97, 75 A. 757; Deseumeur v. Rondel, 76 N.J.Eq. 394, 74 A. 703; Meyer v. Madreperla, 68 N.J.L. 258, 53 A. 477, 96 Am.St.Rep. 536; Franklin v. Creth, 97 N.J.Eq. 538, 128 A. 268; Potter v. Lumsden, 93 N.J.Eq. 476, 117 A. 31; Richards v. Knight, 64 N.J.Eq. 196, 53 A. 452; Commercial Trust Co. v. Zunni, 108 N.J.Eq. 435, 155 A. 456, affirmed 110 N.J.Eq. 569, 160 A. 634; Acquackanonk Bldg. & Loan Assoc. v. Parsonnet, 107 N.J. Eq. 48, 151 A. 865; Crane v. Decamp, 21 N.J.Eq. 414; Vandermade v. Appert, 125 N.J.Eq. 366, 5 A.2d 868; Thorp v. Pettit, 16 N.J.Eq. 488; Trenton Potteries Co. v. Blackwell, 137 N.J.Eq. 113, 43 A.2d 831; Bank of Montclair v. Mallas, 120 N.J.Eq. 611, 186 A. 694; Burke v. Dorfan, 101 N.J.Eq. 84, 137 A. 844; Pound v. Pleister, 106 N.J.Eq. 101, 150 A. 58, affirmed 107 N.J.Eq. 577, 153 A. 907; Smith v. Reidy,92 N.J.Eq. 586, 113 A. 774; Trinity Cathedral v. Etz, 137 N.J.Eq. 261, 44 A.2d 394; Kohlrepp v. Ram, 79 N.J.Eq. 386, 81 A. 1103; Methodist Episcopal Church v. Roberson, 68 N.J.Eq. 431, 58 A. 1056; Propper v. Colson, 86 N.J.Eq. 399, 99 A. 385; Sheehan v. Humphreys, 81 N.J.Eq. 416, 83 A. 189; McKibbin v. Brown, 14 N.J.Eq. 13, affirmed 15 N.J.Eq. 498; Potter v. Hollister, 45 N.J.Eq. 508, 18 A. 204, affirmed 46 N.J.Eq. 609, 22 A. 56; Myers v. Metzger, 63 N.J.Eq. 779, 52 A. 274; Wilson v. Vogel, 87 N.J.Eq. 584, 101 A. 173. And there are numerous other cases in our reports to the same effect-most, if not all, of which I have examined. In Tillotson v. Gesner, supra, Mr. Justice Scudder, speaking for the Court of Errors and Appeals, at page 327 of 33 N.J.Eq., said:

‘The purchaser should have a title which shall enable him not only to hold his land, but to hold it in peace; and if he wishes to sell it, to be reasonably sure that no flaw or doubt will come up to disturb its marketable value. The court cannot satisfactorily or conclusively settle a title in the absence of parties who are not before them in the suit to assert their estate or...