Delancey & Stockton Corp.. v. Reliable Imp. Co.

• Decision Date: 17 September 1943
• Docket Number: No. 212.,212.
• Citation: 33 A.2d 848
• Parties: DELANCEY & STOCKTON CORPORATION v. RELIABLE IMP. CO.
• Court: New Jersey Supreme Court

33 A.2d 848

DELANCEY & STOCKTON CORPORATION v. RELIABLE IMP. CO.

No. 212.

Court of Errors and Appeals of New Jersey.

Sept. 17, 1943.

Appeal from Court of Chancery.

Condemnation proceeding by the State Highway Commissioner, wherein the Reliable Improvement Company filed a petition seeking to have the condemnation award paid over to it as the owner of the land involved, which petition was resisted by the Delancey & Stockton Corporation, claiming the fund as vendee under a contract. From an order directing payment of the fund to the Reliable Improvement Company, the Delancey & Stockton Corporation appeals.

Order affirmed.

The CHIEF JUSTICE, DONGES, HEHER and PERSKIE, Justices, and RAFFERTY, Judges, dissenting.

G. W. C. McCarter, of Newark, for appellant.

Ralph E. Lum and Lum, Fairlie & Wachenfeld, all of Newark, for respondent.

The opinion of Vice Chancellor BIGELOW, in the court below, is as follows:

This matter grows out of the condemnation by the State Highway Commissioner of land of the petitioner, Reliable Improvement Company. Commissioners were appointed and made an award of the value of the land, and the Highway Commissioner paid the amount of the award into court. The petitioner prays that the money be paid over to it. The respondent, Delancey & Stockton Corporation, which claims an interest in the tract and in the award representing its value, resists payment to the petitioner.

The next objection goes to procedure. The Reliable Improvement Company, on filing its petition, verified in much detail, obtained an order, returnable December 29, 1942, directing the respondent to show cause why the moneys should not be paid to petitioner. On the return day, respondent asked for and got a continuance to January 6th and was informed by me, ‘If counsel for respondents then show some colorable defense on the merits, which they have not been able to prepare, a motion for another week will then be sympathetically heard.’ On the adjourned day respondent presented a lengthy affidavit setting forth the facts upon which it relies and asked no further time.

Counsel urge that a day should be designated and the facts established by testimony in open court, or else there be a reference to a master. I would be in complete accord were there dispute over the material facts, but I find none. Indeed if the position of the respondent on the merits were not clear, I would order a formal answer to be filed to the petition. The statute directs merely that the award paid into court ‘shall there be distributed according to law, on the application of any person interested therein.’ R.S. 20:1-15, N.J.S.A. Long established procedure is petition and order to show cause and, if a factual controversy appears, then a reference to a master, or in rare cases, proofs presented in open court. The objection to the procedure is overruled.

Now to the merits. The petitioner was the owner of a large tract of vacant land in the Newark meadows. On November 4, 1940, it contracted to sell four acres of the tract to respondent for $25,000. The fund in court, $32,000, is the award for the land respondent had contracted to buy. Its claim to the fund is based on the contract. The petitioner rejoins that respondent by its default and laches forfeited any rights under the contract.

The contract called for the closing of title ‘on a day to be mutually agreed upon, in no event more than 90 days from the date hereof.’ The 90th day was February 2, 1941. The parties also agreed that ‘taxes are to be apportioned as of the time of delivery of deed.’ Now the whole of petitioner's tract, of which the land described in the contract was part, was taxed as a single lot, so it was necessary to have the Board of Assessment distribute the tax between the parcel sold respondent and the parcel retained, in order that the tax on the former could be apportioned to the day of closing. This was done early in April 1941, and on the 7th, Mr. Lehlbach, counsel for petitioner, sent to Mr. McCarter, president and counsel of respondent, the apportionment figures calculated to April 10th and suggested closing on that day. Mr. McCarter immediately replied that he could not promise that his clients would be ready to close on that day.

I here interpolate that shortly before, namely, April 4th, the State Highway Engineer had written respondent opening negotiations for the purchase of the land which it eventually condemned.

On April 18th, petitioner delivered to respondent formal written notice that petitioner would expect to close title on Thursday, April 24, 1941, at 10 a. m., at Mr. McCarter's office, ‘and that said time is made of the essence of the contract.’

Mr. Lehlbach two days later wrote Mr. McCarter about a small encumbrance, a sewer assessment of $180, and suggested that the respondent bear this burden. Mr. McCarter promptly declined and Mr. Lehlbach did not press his suggestion further. In the same letter, dated April 22d, Mr. McCarter explained his inability to close on the day which petitioner had fixed: ‘I cannot possibly close on the 24th, because I have to argue a case specially set for oral argument before the Court of Errors and Appeals on that day, and on the following day I have to go to Philadelphia before the United States Circuit Court of Appeals for the Third Circuit; so I do not see how there is any possible opportunity of closing before next week * * *.’

Then follows a series of letters in which Mr. Lehlbach extends the day for passage of title successively to May 8, May 12, May 15 or 16 (whichever may suit Mr. McCarter) and finally to May 21st. And Mr. McCarter replies that other business prevents-‘I have to be in Washington.’ ‘A case specially set in the Circuit.’ ‘All I can say now is by sometime next week I firmly expect to know and say just when.’

Mr. Lehlbach's last letter in this series, dated May 14th, stated, ‘In view of your inability to close either on May 15 or 16, as mentioned in my letter of May 5, the Reliable Improvement Company will further extend the time set in the notice of April 18, 1941, from the time of closing therein set, namely April 24, 1941, to Wednesday, May 21, 1941, at 10 A.M., at your office.’ This letter remained unanswered.

On the morning of the day set, the two gentlemen conferred over the telephone. Mr. Lehlbach stated he was ready to close. Mr. McCarter was not ready and was unable to say when his company would be ready. Then Mr. Lehlbach informed him that ‘we would have to rest on our rights under the contract as extended, and would have to leave you to your rights, if any.’

Thus, more than six months after the date of the contract, petitioner abandoned its attempts to get respondent to fulfill. Another year and a half have now passed during which respondent has never tendered the purchase price, or in any way indicated a desire to go ahead with the sale.

Upon an executory agreement for the sale of lands, the purchaser becomes the equitable owner of the lands and he holds the purchase money in trust for the vendor. This doctrine is an application of the maxim that equity regards as done what ought to be done, Pom.Eq.Jur. Sec. 368, and on it specific performance mainly depends. Haughwout v. Murphy, 22 N.J.Eq. 531, 546. And from the same principle follows that if the land, while subject to the contract of sale, is taken in condemnation, so much of the award as will satisfy the purchase money belongs to the vendor and the balance to the purchaser, Rappoport v. Crawford, 99 N.J.Eq. 669, 134 A. 120. Conversely the purchaser has no...