Coolidge & Sickler v. Regn

• Citation: 7 N.J. 93,80 A.2d 554
• Decision Date: 07 May 1951
• Docket Number: No. A--102,A--102
• Parties: , 27 A.L.R.2d 437 COOLIDGE & SICKLER, Inc. v. REGN et al.
• Court: United States State Supreme Court (New Jersey)

Page 93

7 N.J. 93

80 A.2d 554, 27 A.L.R.2d 437

COOLIDGE & SICKLER, Inc. v. REGN et al.

No. A--102.

Supreme Court of New Jersey.

Argued March 12, 1951.

Decided May 7, 1951.

W. Louis Bossle, Camden, argued the cause for the appellant.

Anthony C. Mitchell, Camden, argued the cause for the respondents.

The opinion of the court was delivered by

ACKERSON, J.

This is an appeal from a final judgment of the Superior Court, Chancery Division, in a vendor's action for specific performance of a contract for the sale of real estate. The trial court dismissed the complaint and ordered the return of the deposit money to the vendees on their counterclaim.

The basic facts are not in dispute. In May, 1949, the plaintiff, Coolidge & Sickler, Inc., was foreclosing a mortgage it held on premises owned by Charles Cornaglia and Pauline, his wife, consisting of a two story combined grocery store and dwelling with a garage. The defendant, Mary K. Regn, was quite familiar with the property and interested in its purchase. She was interviewed by the mortgagors (the Cornaglias) who asked $4,000 over the mortgage debt (or a total of $12,000) for the conveyance. She consulted a real estate broker, a Mr Fanelli, who had the property for sale and through whom she believed it could be purchased at a lower figure. On June 3, 1949, Mr. Fanelli wrote to the plaintiff offering $8,000 for the real estate and enclosed a check in the sum of $200 as a deposit upon the condition that the fixtures pertaining to the building were included in the sale. Plaintiff replied on June 6, 1949, accepting the offer on the above terms subject to its securing title to the property at the Sheriff's sale under the pending foreclosure.

The plaintiff, having bid in the property at the Sheriff's sale on June 17, 1949, prepared a written contract of sale which was mailed to the real estate agent for defendants' signatures. The defendants made a further payment of $800 on the execution of the instrument. Passing of title was fixed for August 23, 1949, with a proviso that in the event the former owners, who had remained on the property after the foreclosure sale, had not vacated by that time, the closing date would be extended thirty days; viz., to September 22, 1949. It was not until August 29, 1949 that the tenants (the Cornaglias) were evicted by the Sheriff under a writ of possession, and by reason of such delay, the thirty day extension period went into effect under the provisions of the agreement of sale.

The day after the Cornaglias had been removed, Mrs. Regn inspected the premises and complained of its condition to Mr. Fanelli. An examination of the property on August 31, 1949, in the presence of Mr. Coolidge, president of the plaintiff corporation, disclosed that the property had been thoroughly vandalized. Plaintiff concedes that the Cornaglias committed all the acts of vandalism just prior to their eviction. The investigation disclosed that the electric light fixtures in the bathroom, kitchen and store were gone. The kitchen range, sink and cabinets were missing as well as certain fixtures in the bathroom. Considerable damage had been inflicted in the store as well. The insulation of a 'walk-in' icebox had been chopped off, holes punched in the cinder blocks and the heavy door removed. The plaster on the outside wall had been entirely destroyed. There were holes in the floor of the store, the shelves and show cases were missing, and a partition had been removed which caused the upper floor to sag. In the cellar the heating pipes were missing as were the fittings of the electric pump for the well (which was the only water supply), the fuse box had been damaged, the cesspool littered with debris and a large part of the shingles on one side of the garage had been torn off. The premises were also seriously damaged in other respects.

The primary question presented on this appeal is whether the trial court properly interpreted the contract of sale as placing the loss due to vandalism occurring subsequent to the execution of the contract upon the plaintiff vendor. The pertinent provisions of the agreement read as follows:

'4. * * * the premises shall be conveyed in the same condition as the same now are, reasonable wear and tear excepted.

'9. This agreement includes all fixtures permanently attached to the building or buildings herein described, and appurtenances; also specifically includes the following items:

'9a. It is understood and agreed that there is erected on the premises covered by your agreement, a one car garage and in the event that said garage should be removed by the tenant, the said party of the second part (the buyers), by their option, shall be released of any obligations to comply with the terms of this agreement.

'10. Physical condition of the property is sold 'as is' except that the Seller agrees that the property will not be stripped of bathroom fixtures, heating equipment, electric pump, electric fixtures in the dwelling.'

Upon the occasion of their examination of the premises in its vandalized condition, on August 31, 1949, Mrs. Regn told Mr. Coolidge that 'there is no law in the United States could make me take this property in this condition, * * *'. On September 1, 1949, the vendor served written notice upon Mrs. Regn advising her that settlement would be demanded on September 22, 1949 and that it was prepared to perform and comply with all the terms of the agreement of sale, of course, as interpreted by the vendor. However, plaintiff made no effort to restore the premises to the condition they were in at the time the contract of sale was entered into, on June 23, 1949, and on September 22nd, the property still remained in its vandalized condition. After the date of settlement had expired, defendants elected to rescind the contract and asked for the return of their $1,000 down payment. The response to this demand was the present suit for specific performance in which the complaint was dismissed and the defendants were awarded the return of the deposit money, without interest or costs. Plaintiff appealed therefrom to the Appellate Division, and the cause while there pending was certified here on our own motion.

At the conclusion of the case, the trial court summarized its findings as follows: 'It is the Court's factual understanding and determination from the testimony that the damages to the property, other than those covered by the contract of sale, were caused by the former owners and tenants; that the parties in this case did consider the probable actions by these people, and did take care of such consequences by the 'as is' paragraph of the contract; namely, Paragraph Ten. It is this Court's feeling that the 'as is' understanding of the plaintiff and the defendant was the condition of the property on June 23, 1949, and not September 22, 1949, the closing date; that the plaintiff did not offer to restore the premises to the condition in which the premises were on June 23, 1949, but did offer to restore the items mentioned in Paragraph Ten; that the defendant, Mrs. Regn, refused to take possession of the property unless the premises were restored to the condition they were in on June 23, 1949; * * *'.

Plaintiff contends the trial court erred in thus interpreting the phrase 'sold 'as is", appearing in Paragraph 10 of the contract. It admits, however, if that part of Paragraph 4 reading: '* * * the premises shall be conveyed in the same condition as the same now are, reasonable wear and tear excepted', stood alone, it would have been incumbent upon it to bear the loss due to the vandalism, or suffer the defendants' rescission of the contract. It is insisted,...