Schwenn v. S. Goldberg & Co.

• Decision Date: 28 May 1965
• Docket Number: No. L--12035,L--12035
• Citation: 210 A.2d 808,88 N.J.Super. 113
• Parties: William J. SCHWENN, Plaintiff, v. S. GOLDBERG & CO., Inc., a corporation of New Jersey, Defendant.
• Court: New Jersey Superior Court

Page 113

88 N.J.Super. 113

210 A.2d 808

William J. SCHWENN, Plaintiff, v. S. GOLDBERG & CO., Inc., a corporation of New Jersey, Defendant.

No. L--12035.

Superior Court of New Jersey Law Division.

May 28, 1965.

Ralph W. Chandless, Hackensack, for plaintiff (Chandless, Weller & Kramer, Hackensack, attorneys).

Jacob Schneider, Englewood, for defendant (E. Dennis Brod, Englewood, on the brief).

BOTTER, J.S.C.

This is the determination of motions for summary judgment brought by both parties, plaintiff and defendant. Plaintiff is a real estate broker who claims a commission for bringing about the acquisition of defendant's property by the County of Bergen. Defendant had agreed to pay plaintiff a commission of 10% Of the proposed selling price, $285,000. The county did not agree to the terms of sale offered by defendant, and a contract for the sale of the property was never consummated. However, the county proceeded to take the property through condemnation proceedings and ultimately paid defendant $314,500 for the property. Plaintiff contends that the circumstances of the acquisition entitle him to a commission. Defendant denies liability as a matter of law. The facts in the case are found in the affidavits and depositions in this cause as well as in the record of the condemnation proceedings. Appeals in the condemnation proceedings are reported in County of Bergen v. S. Goldberg & Co., Inc., 76 N.J.Super. 524, 185 A.2d 38 (App.Div.1962), reversed 39 N.J. 377, 189 A.2d 4 (1963), and County of Bergen v. City of Hackensack, 84 N.J.Super. 252, 201 A.2d 734 (App.Div.1964).

In October 1960 the City of Hackensack (Hackensack) sold at public auction a tract of vacant land consisting of approximately 11 or 12 acres. S. Goldberg & Co., Inc. (Goldberg) was the successful bidder. Goldberg's bid of $226,000 was accepted by the City Council of Hackensack on October 18, 1960, subject to various conditions of sale. Certain of these conditions were included in the deed of conveyance to Goldberg dated November 3, 1960, namely (a) that within two years from the date of the deed a building would be constructed on the premises at a cost of at least $300,000, and (b) if such construction was not completed before November 1, 1962, the City of Hackensack had the right to receive from the owner of the premises as liquidated damages a sum of money equal to the taxes that would have been levied against a structure having a market value of $300,000. The deed described these conditions as 'covenants and conditions 'which shall run with the land and be binding upon the party of the second part, its successors and assigns. " See County of Bergen v. City of Hackensack, supra, 84 N.J.Super., at pp. 254, 255, 201 A.2d at p. 735.

Around this time the board of freeholders was interested in finding a site for a county jail annex. A committee had been formed to recommend a suitable site. Plaintiff, a licensed real estate broker, learned of this activity and brought defendant's property to the attention of William R. Smith, the executive administrator for the board of freeholders. Smith called the site to the attention of the committee and it was found acceptable. Smith then authorized plaintiff to negotiate with the owner for the purchase of the property.

Sometime in April 1961 plaintiff communicated with Sidney N. Goldberg, president of defendant, concerning the sale of the property. By letter of April 28, 1961, signed by Mr. Goldberg and addressed to plaintiff, defendant offered to sell the property to the County of Bergen for $285,000 'Net Cash.' The letter called for a deposit of $28,500, execution of a contract of sale duly authorized by the county on or before May 10, 1961, title closing to be on or before July 10, 1961, and title to be 'in accordance with deed dated November 3, 1960, copy of which is attached hereto and made a part hereof.'

Thereafter, on May 9, 1961, defendant gave plaintiff a second letter, offering the property at $285,000 'with a commission at the rate of 10% Of that amount to be paid to you at time of closing.' Other terms contained in the earlier letter were repeated, except that the dates for execution of a contract for sale and title closing were changed. This letter also recited that title was to be in accordance with the deed of November 3, 1960 by which defendant acquired the property from the City of Hackensack. A third letter, dated May 16, 1961 and addressed to the board of freeholders, confirmed the same terms of the offer, except that the dates for contract and title closing were changed again, this time to June 15, 1961 and August 16, 1961, respectively. This letter recited that the deed offered was a 'Bargain and Sale deed.'

In May 1961 county counsel prepared a proposed contract for the sale of the property which differed in several respects from the terms of defendant's offer. It called for conveyance by warranty deed; it made the transaction subject to the completion of proceedings to appropriate money to finance the purchase of the property; and it called for no deposit on signing of the contract. Most importantly, it rejected defendant's offer to convey such title as defendant had obtained from the City of Hackensack, but instead provided that:

'The Seller, on or before July 1, 1961, shall secure an appropriate instrument from the City of Hackensack, releasing and discharging the covenants and conditions set forth in the Deed to the Seller, dated November 3, 1960, recorded in Book 4183, at page 123 et seq., imposing upon the Seller herein, its successors and assigns, the obligation to construct a building on the premises in question, the aggregate cost of which shall not be less than $300,000.00 and providing for payments in lieu of taxes in the event that such building is not so erected, so that the premises shall be conveyed to the County of Bergen, free and clear of all of such covenants and conditions.'

The proposed contract was never signed. The intransigent obstacle to the transaction was the construction provision in the deed from the City of Hackensack. Neither the county nor Goldberg would assume the risk of Hackensack's rights arising out of the construction covenant. Goldberg's offer to sell the property was made subject to those rights, if any; and the county would not take title unless it obtained the release of any interest the City of Hackensack might have. Plaintiff sought to obtain Hackensack's release of its rights but was unsuccessful. On December 20, 1961 the county instituted condemnation proceedings against defendant and the City of Hackensack. The complaint recited that the county was unable to acquire the property by agreement with the owner and that the persons appearing to have an interest in the property were defendant as owner and the City of Hackensack by virtue of the covenant requiring construction on the property.

The City of Hackensack filed an answer opposing the county's right of condemnation. The Law Division entered an order of condemnation on February 2, 1962 and appointed three condemnation commissioners. Hackensack appealed the order, contending it was not afforded an adequate opportunity by the trial court to defend against the county's arbitrary and unjustified acquisition. The Appellate Division on October 25, 1962 affirmed the trial court's action (76 N.J.Super. 524, 185 A.2d 38), but on March 4, 1963 the Supreme Court reversed (39 N.J. 377, 189 A.2d 4) and remanded for a prompt trial. The order of February 2, 1962 allowing the condemnation and appointing condemnation commissioners was set aside.

Pending this appeal, however, the condemnation proceeding went forward based upon the February 2, 1962 order of the Law Division. The condemnation commissioners scheduled a hearing in May 1962. The county and Goldberg then agreed to a stipulation of settlement by which the value of the property was fixed at $285,000, to be paid on or before June 30, 1962. By this stipulation Goldberg also agreed to pay any award which might be determined in the proceedings to be due to the City of Hackensack by virtue of the deed covenants. This settlement was never consummated, however. By virtue of the appeal the City of Hackensack was permitted to litigate the county's right to condemn the property. Although this right was upheld by the Law Division on March 19, 1963, it was not until June 24, 1963 that the Law Division entered a new order of condemnation, appointing the same three condemnation commissioners to fix the value of the property. Hearings were held on July 30, 1963 and August 13, 1963. All parties participated and offered testimony as to the value of the property. Later in August 1963 the condemnation commissioners filed their report fixing the value of the property at $288,500. The county was then allowed to pay this award into court because of Hackensack's claim to a part of the award.

On August 30, 1963 Goldberg appealed from the award made by the commissioners and demanded trial by a struck jury. The county and Goldberg then agreed to stipulate to a value of $314,500 for the property. With their consent, and without objection by the City of Hackensack, an order was entered by the Law Division on October 25, 1963 increasing the commissioners' award to $314,500, allowing the additional $26,000 to be paid to the Clerk of the Superior Court, and the appeal from the condemnation commissioners' award was dismissed with prejudice.

The next significant step in the saga was a petition by Goldberg for an adjudication of Hackensack's claim to a part of the award. The court ordered Hackensack to file a petition setting forth the amount and basis of its claim. Hackensack did so, claiming that its interest in the fund was $58,837.35. Hackensack contended it was entitled to an equitable rescission of its sale to Goldberg due to the impossibility of performance of the deed conditions. Hackensack contended that Goldberg should get back the original purchase...