Lobsenz v. Micucci Holdings, Inc.

• Citation: 316 A.2d 59,127 N.J.Super. 50
• Parties: Theodore A. LOBSENZ, Plaintiff-Respondent, v. MICUCCI HOLDINGS, INC., a New Jersey corporation, Defendant, Sic & Due, Inc., a New Jersey corporation, Appellant.
• Decision Date: 04 March 1974
• Court: New Jersey Superior Court – Appellate Division

Page 50

127 N.J.Super. 50

316 A.2d 59

Theodore A. LOBSENZ, Plaintiff-Respondent, v. MICUCCI HOLDINGS, INC., a New Jersey corporation, Defendant Sic & Due, Inc., a New Jersey corporation, Appellant.

Superior Court of New Jersey Appellate Division.

Submitted Jan. 28, 1974.

Decided March 4, 1974.

Kimmel & Cavaliere, Paterson, for appellant.

Theodore A. Lobsenz, respondent, pro se.

Before Judges LEONARD, ALLCORN and CRAHAY.

The opinion of the court was delivered by

ALLCORN, J.A.D.

Since the decision in Hardyston Nat. Bank v. Tartamella, 56 N.J. 508, 267 A.2d 495 (1970), it has been settled in this State that an owner-mortgagor has a right to redeem the mortgaged property following foreclosure and sale thereunder, by the payment in full of the mortgage indebtedness, costs of foreclosure and costs of sale. Under Hardyston the right must be exercised 'within the ten-day period fixed by R. 4:65--5 for objections to the sale and until an order confirming the sale if objections are filed under the rule.' Id. at 513, 267 A.2d at 498.

This right of redemption confirmed in Hardyston is not fashioned by nor dependent upon statute; instead, it is a right created and 'devised by equity to protect him (the mortgagor) from the forfeiture of his title.' Ibid.; compare N.J.S.A. 2A:50--4. It is thus closely comparable to the owner-mortgagor's equity of redemption and much like an extension of it. But, whatever its precise nature and however characterized, the right of redemption obviously is a valuable right and, as such, is subject to transfer and conveyance just as is any other right, title or interest in or to real property. See Ghee v. Davenport, 4 N.J.Super. 518, 68 A.2d 284 (App.Div.1949), aff'g 2 N.J.Super. 532, 64 A.2d 902 (Ch.Div.1949); compare 2 Glenn on Mortgages, § 238 (1943).

Given the existence of the right to redeem in the owner-mortgagor and the transferability of that right by the latter to a third person in exchange for a consideration, the fairness and adequacy of which is not challenged, the trial court here declined to permit the transferee to exercise the right to redeem, on the ground that to do so would offend a public interest. It would, it was said, 'seriously impede the judicial process in mortgage foreclosures and lend aid to disruption of orderly mortgage foreclosure sale procedures by speculators in mortgagor's rights,' much like the intrusion and interference by speculators condemned in Bron v. Weintraub, 42 N.J. 87, 199 A.2d 625 (1964). In our view the analogy is not well-taken, and we perceive no valid public interests or considerations of policy that would be adversely affected by the exercise of the right to redeem by a transferee of the owner-mortgagor.

In the present case the owner-mortgagor has transferred and assigned his right to redeem (as well as his right and interest to the building heating system) for a consideration of $5,000--the payment thereof being made contingent upon the transferee being permitted to exercise the right of redemption. If the transferee is permitted to redeem, the mortgagee is rendered whole and the owner-mortgagor is benefited. Thus, the mortgagee would receive the full amount of the mortgage indebtedness, including interest, plus his costs and expenses in the foreclosure proceedings and on the sheriff's sale. The owner-mortgagor, in turn, would receive the sum of $5,000, and the deficiency amounting to some $55,000 would be completely eliminated. At the same time, the transferee would have title to the premises, unencumbered by the mortgage, for which he will have paid a sum in excess of $60,000.

If, on the other hand, the proposed redemption is barred and, as a result, fails of consummation, the owner-mortgagor is deprived of the $5,000 consideration for his redemptive right, and the $55,000 deficiency remains unsatisfied--for the whole of which the owner-mortgagor remains personally liable, without credit for fair market value under N.J.S.A. 2A:50--3, this being a note mortgage rather than a bond mortgage. 79--83 Thirteenth Ave., Ltd. v. De Marco, 44 N.J. 525, 210 A.2d 401 (1965). At the same time, the mortgagee would receive a windfall which, by his own reckoning, amounts to more than $2,500. For, he will then have the property which, he asserts in his brief, 'the only recent independent appraisal of the property * * * just completed by * * * Garfield' under its program of 'revaluation to 100% Assessment', resulted in an assessed value of $58,000 for the year 1973. Having bought in the property at the foreclosure sale for the sum of $100, and the deficiency remaining...