Raniere v. I & M Investments, Inc.

• Decision Date: 02 May 1978
• Citation: 159 N.J.Super. 329,387 A.2d 1254
• Parties: Tony E. RANIERE and Margaret Raniere, Plaintiffs, v. I&M INVESTMENTS INC. and the Central Jersey Bank and Trust Company, a bankingcorporation, and Colonial Mortgage Service Company, Defendants.
• Court: New Jersey Superior Court

Page 329

159 N.J.Super. 329

387 A.2d 1254

Tony E. RANIERE and Margaret Raniere, Plaintiffs, v. I&M INVESTMENTS INC. and the Central Jersey Bank and Trust Company, a bankingcorporation, and Colonial Mortgage Service Company, Defendants.

Superior Court of New Jersey,Chancery Division.

May 2, 1978.

Daniel O'Hern, Red Bank, for plaintiffs (Abramoff, Apy & O'Hern, Red Bank, attorneys).

Frederick L. Blankenhorn, Asbury Park, for defendant Central Jersey Bank & Trust Co.

Steven Pfeffer, Lakewood, for defendants I&M Investments Inc. and Colonial Mortg. Service Co. (Matthews, Levin, Shea & Pfeffer, Lakewood, attorneys).

YACCARINO, J. S. C.

This matter comes before the court on motion by defendant Central Jersey Bank and Trust Company seeking an order dismissing plaintiffs' complaint for failure to state a claim upon which relief can be granted. Plaintiffs filed a cross-motion for summary judgment setting aside the sheriff's sale on the grounds that execution was not made on plaintiffs' personalty prior to execution on the realty in question.

In April 1975 plaintiffs' daughter Kathleen Dunay, as borrower, executed and delivered to defendant Central Jersey Bank and Trust Company a promissory note in the face amount of $4,536. Plaintiffs executed the note as comakers. Ms. Dunay made payments against the note, reducing it to approximately $1,144 before defaulting on her obligation. On January 13, 1977 Central Jersey Bank and Trust Company instituted an action on the note against Kathleen Dunay, Tony Raniere and Margaret Raniere in Monmouth County District Court. Judgment in the sum of $1,370.33 was entered against those defendants on February 17, 1977, and docketed in the Superior Court on February 24, 1977, under docket number D.J. 18448-76.

By letter dated Friday, March 4, 1977, former counsel for the Central Jersey Bank and Trust Company forwarded to the Monmouth County Sheriff's Office the following communication:

Enclosed please find original and three copies of Writ of Execution, together with metes and bounds description of premises owned by the defendants Tony Edward Raniere and Margaret Raniere. Please have the Deputy levy on the real estate, and advise.

The writ was received by the Monmouth County Sheriff's Office in Freehold, New Jersey, at 10:39 a. m. on Monday, March 7, 1977. It contained the standard language commanding the sheriff to:

* * * satisfy the said judgment out of the personal property of the said judgment debtor within your County; or if sufficient personal property cannot be found, that out of the real property in your County belonging to such judgment debtor at the time when the said judgment was so docketed in the Office of the Clerk of the Superior Court, or at any time thereafter, in whose hands soever the same may be, and you do pay the said moneys levied by you to the said The Central Jersey Bank and Trust Company, a banking corporation. * * *

However, the return writ indicates that at 11:15 a. m. on the very same day the deputy sheriff levied upon certain land and premises owned by plaintiffs, Tony and Margaret Raniere, and commonly known as 12 Elizabeth Parkway, Eatontown, New Jersey. By letter dated Monday, March 7, 1977, the sheriff's office advised the bank's attorney that "a levy was made on the realty in accordance with description furnished this office."

The execution sale, originally scheduled for May 9, 1977, was adjourned to May 23, 1977, at which time the subject premises were purchased by Lawrence Ariando with a bid of $1,410.07. The total sum due the Central Jersey Bank, together with interest and costs, amounted to $1,410.07. The premises were assessed at $40,000 and were subject to an $8,000 mortgage and a financing statement in the sum of $1,915.60. The successful bid was assigned to defendant I&M Investments Inc., which paid off existing liens and placed a $23,400 mortgage on the premises in favor of defendant Colonial Mortgage Service Company.

On August 15, 1977 plaintiffs filed a verified complaint seeking to restrain defendant I&M from taking possession of or conveying the subject premises. Plaintiffs allege that they were never served with the summons and complaint in the county district court action and had no knowledge of any proceedings against them until shortly before July 21, 1977, when they were notified by their former mortgagee that its mortgage had been paid off by a third party. Plaintiffs therefore demand judgment setting aside the sheriff's sale and vacating the Superior Court and District Court judgments entered against them. Defendant Central Jersey Bank and Trust Company moves to dismiss the complaint for failure to state a cause of action against it. For the reasons that follow, the court denies defendant's motion and enters summary judgment in favor of plaintiffs, vacating the May 23, 1977 sheriff's sale.

At common law real property was not subject to execution. Alt v. Kwiatek, 128 N.J.Eq. 469, 471, 17 A.2d 161 (Ch.1941); Voorhees v. Chaffers, 24 N.J.L. 507, 509 (Sup.Ct.1854). In 1743 the General Assembly of the Province of New Jersey made real estate chargeable with debts and liable to be sold for their satisfaction, and authorized the issuance of executions commanding the sheriff to make sale of the land for that purpose. Neville's Laws, 279-81; Voorhees v. Chaffers, supra; Ackerson & Fulop, 20 N.J.Practice § 1889 (1973). The Legislature of the State of New Jersey enacted a statute in 1799 making real estate subject to execution for debts, "coupled with the condition, however, which we find in our system, providing for the exhaustion of the personalty prior to the sale of the land." Bulat v. Londrigan, 63 N.J.Eq. 22, 27, 50 A. 909, 911 (Ch.1902), aff'd o. b. 65 N.J.Eq. 718, 60 A. 1133 (E. & A.1903); Palladino v. Hilpert, 72 N.J.Eq. 270, 275, 65 A. 721 (Ch.1906).

In 1846 the act was amended to require that in every writ of execution against real estate the sheriff shall be commanded to satisfy the debt out of the goods and chattels located within his county, and if sufficient personalty cannot be located within the county, he may proceed against the lands of the debtor. The act further provided that the judgment debtor had the right to require the sheriff to sell his real estate before selling his goods and chattels. Rev.Stat. of 1846, at 660. The obvious reason was that in some instances it would work a greater hardship on the debtor to have his personalty and implements of trade sold than to have his real estate disposed of. Bulat v. Londrigan, supra, 63 N.J.Eq. at 27, 50 A. 909. The option was therefore given to the judgment debtor.

The Legislature took further steps to insure against indiscriminate seizures of debtors' realty. Thus, the General Statutes of 1877, § 77 at 1228, required that before a judgment could be docketed as a lien against the debtor's land, the judgment creditor or his attorney had to file the following documents with the clerk: a transcript of the proceedings which led to judgment; a copy of the constable's return writ, endorsed to the effect that he could not find sufficient personal property of the debtor within the county to satisfy the judgment, and an affidavit of the creditor or his attorney stating the amount due on the judgment and his belief that the debtor is not seized of sufficient goods and chattels from which to satisfy the debt. A docketing which did not fulfill these three requirements was utterly void. Tasto v. Klopping, 43 N.J.L. 448 (E. & A.1881).

In 1882 the act was amended to provide that the filing of a statement containing the names of the parties and court, the amount of the judgment and the dates of the judgment and issuance and return of execution would be sufficient to satisfy the prior transcript requirement. Gen.Stat. of 1882, §§ 4 & 5 at 1260. In construing the legislation the court in Grimshaw v. Carroll, 62 N.J.L. 730, 42 A. 733 (E. & A.1898), determined that the requirement of an affidavit had not been abrogated. The court concluded:

Bearing in mind that the object of docketing a judgment in the common pleas is to reach the debtor's lands, and that the legislative policy in this state has generally been, not to resort to lands for the satisfaction of judgments if goods and chattels are available, we think the legislature intended to leave untouched the requirement of this affidavit as some safeguard against the unnecessary alienation of the debtor's lands. (at 732, 42 A. at 734)

The present statute, N.J.S.A. 2A:17-1, clearly and unequivocally expresses the legislative mandate that before the real property of a debtor may be seized and sold, the sheriff shall first levy upon the debtor's goods and chattels located within the county to satisfy the judgment and costs. The statute reads In every writ of execution which shall be issued against real estate, the sheriff or other officer to whom such writ may be directed shall be commanded that he cause to be made, of the goods and chattels in his county of the party against whom such execution issues, the debt, damages and costs or sums of money mentioned in...