Casriel v. King.

• Decision Date: 04 April 1949
• Docket Number: No. A-227.,A-227.
• Parties: CASRIEL et al. v. KING.
• Court: New Jersey Supreme Court

65 A.2d 514

CASRIEL et al.

v.KING.

No. A-227.

Supreme Court of New Jersey.

April 4, 1949.

Appeal from former Court of Chancery.

Suit by Lillian Casriel and others against Lila W. King for specific performance of a contract for sale of realty. From a decree granting specific performance, 141 N.J.Eq. 515, 58 A.2d 269, the defendant appeals.

Affirmed.

Milton M. Unger, of Newark (Adrian M. Unger, of Newark, on the brief), for appellant.

Ward Kremer, of Asbury Park, for respondents.

HEHER, Justice.

The challenged decree grants to the vendors specific performance of a contract made February 1st, 1947 for the sale of lands and a hotel building situate on the north side of Third Avenue, east of Bergh Street, in Asbury Park (the second block from the beach front); and the vendee appeals pursuant to Article XI, section IV, paragraph 8 of the Constitution of 1947, N.J.S.A., and ch. 367 of the Pamphlet Laws of 1948, N.J.S.A. 2:16-70 et seq.

The contract is not set out in full in the appendix. As revealed by the excerpts taken therefrom, it does not provide in terms for a conveyance of the lands free from all encumbrances except those specified, but merely for a conveyance ‘Subject to covenants, conditions and restrictions of record, which have not been violated;’ and subject also ‘to state and municipal laws and requirements as to the use, location and constructions of the building and premises, which have not been violated,’ and ‘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.’

The primary question for decision is the meaning of the first of the foregoing clauses. The vendee refused performance ostensibly upon the ground that the title was encumbered by ‘covenants, conditions and restrictions of record which have been violated contrary to the provisions' of the contract in suit.

The building housed the ‘Asbury Ambassador Hotel.’ Since April, 1944, the hotel management had sold intoxicating liquors at a bar maintained for the purpose on the first floor of the building under a retail liquor consumption license issued to the operating corporation; and the contract obligated both the vendors and the vendee to do all that was necessary to effect a transfer of the liquor license to the vendee. The transfer of the license was expressly declared to be ‘of the essence’ of the agreement; and it was provided that if the transfer be refused, the contract ‘shall be null and void’ and the payments made thereunder by the vendee shall be refunded, and that ‘the closing of title shall not take place until the transfer of the license is approved by the appropriate municipal authorities.’ The vendee also undertook to purchase, at cost, ‘all alcoholic beverages and other merchandise used in connection with the operation of the bar.’ And it was agreed that the operation of the hotel should continue until the passing of title.

A covenant against the sale of intoxicating liquors on the lands is cited in justification of the refusal of performance.

On November 16, 1875, James A. Bradley, the founder of Asbury Park, conveyed the lands to one Atkins subject to a covenant real barring their use for the sale of intoxicating liquors on pain of a reverter. With some few exceptions, a like restrictive covenant was incorporated in the deeds conveying all the remaining lands in Asbury Park east of the railroad, made by Bradley before and after the deed to Atkins. On January 7, 1944, the substitutionary administrator c.t.a. and trustee under the will of the deceased Bradley quitclaimed the lands in suit to the then holder of the record title, freed of all right of entry and reversion for condition broken ‘or for or by reason of any violation’ of the cited covenant or condition, in consideration of a covenant to run with the land made by the grantee against the sale of intoxicating liquor on the premises, provided that if the original restriction had been ‘abandoned by nonobservance, by change in the character of the neighborhood, by agreement, or otherwise,’ nothing therein contained would serve to revive the obligation or restriction so abandoned, and the new covenant therein ‘in respect to the restriction * * * shall be for nothing holden.’

The insistence is that the clause cited supra constituted ‘a warranty that, in fact, there had been no violations of covenants, conditions and restrictions of record;’ and that ‘the phrase ‘have not been violated“ was not ‘intended to mean otherwise than that’ the vendors ‘were required, and had warranted, to convey a title unencumbered by covenants, conditions and restrictions of record which had been violated.’ The learned Vice Chancellor suggested that this phrase should be construed to read ‘which have not already been violated.’ (141 N.J.Eq. 515, 58 A.2d 269, 276.) Although of the view that the clause ‘was never intended as a warranty that the liquor restriction had not been violated,’ he concluded that ‘If it was so intended by the vendee, she must be held to have waived it.’ And he also found ‘an estoppel against any possible right of rescission,’ and an ‘abandonment’ of the covenant.

As we have seen, the agreement of sale does not expressly provide for a conveyance of the lands free from all encumbrances except those specified. True, in every contract for the sale of lands, an agreement is implied to make good title, barring an expression contra. But the ruling consideration is the intention of the parties. The vendee may undertake to run the risk of an apparent or known deficiency of title, or he may agree to take such title as the vendor is able to give. Lounsbery v. Locander, Err. & App. 1874, 25 N.J.Eq. 554. As in the case of contracts generally, we seek for the intention of the parties.

Were it not for the use of the separative comma, the phrase ‘which have not been violated’ would clearly be restrictive of the class, serving to qualify and limit the antecedent group to include only those covenants and conditions which had not then been violated, rather than constitute a...