United States v. Roebling
| Decision Date | 29 June 1965 |
| Docket Number | Civ. A. No. 848-62. |
| Parties | UNITED STATES of America, Plaintiff, v. Ferdinand W. ROEBLING, III, Defendant. |
| Court | U.S. District Court — District of New Jersey |
David M. Satz, Jr., U. S. Atty., by Lee B. Laskin, Asst. U. S. Atty., for plaintiff.
Backes & Backes, by Robert M. Backes, Trenton, N. J., for defendant.
This is an action for specific performance of a contract for the sale of real estate wherein the United States of America as vendor seeks to compel the defendant Ferdinand W. Roebling, III as vendee to perform his contract to purchase certain lands situate in the Borough of Mantoloking, Ocean County, New Jersey.
Litigation was instituted by the plaintiff when the defendant refused to accept the plaintiff's proffer of conveyance on the ground that the plaintiff's title was unmarketable. Albeit the defendant strenuously resists the primary relief sought by the plaintiff and counterclaims for rescision of the contract together with the return of his deposit with interest, the defendant is ready, able and willing to consummate the contract in the event this Court determines that the plaintiff's title is marketable.
An agreed stipulation of facts has been filed in this matter and the case is submitted to the Court for decision upon the pleadings, exhibits and respective briefs of counsel. Essentially, the facts are as follows:
On or about May 13, 1879, pursuant to a statute enacted by Congress on March 3, 1875, 18 Stat. 371, authorizing the Secretary of the Treasury of the United States to acquire the right to use and occupy sites for life-saving or lifeboat stations, houses of refuge, and sites for pier-head beacons, the plaintiff obtained a deed to the property in question from the owner, Deborah Herbert, and her husband, Jacob B. Herbert. For a number of succeeding years, the property was used and occupied by the plaintiff as a site for a life-saving or life-boat station, the Mantoloking Coast Guard Station having been established thereon. On or before July 27, 1956, acting through the General Services Administration, the plaintiff advertised said property for a sealed bid sale pursuant to the provisions of the Federal Property Administrative Services Act of 1949 (40 U.S.C. § 484) and issued invitations for bids for the purchase of all the plaintiff's right, title and interest in the property.1 On August 27, 1956, in response to the invitation to bid and in accordance with the terms and conditions thereof, the defendant submitted a bid in the amount of $21,600.00 and tendered the sum of $2,160.00 as his deposit for the purchase of said property. Shortly thereafter, on or about August 30, 1956, the defendant's bid was accepted by the General Services Administration on behalf of the plaintiff and the defendant was so notified.
Subsequently, on or about September 1, 1956, the defendant was informed by another bidder, William R. Wesson, that the plaintiff did not own the fee to the property in question, that the title to the property was encumbered by a possible reversionary interest, and that his father's estate was the owner of a one-third reversionary interest. As a result of receiving this information, the defendant ordered an immediate title examination from the New Jersey Realty Title Insurance Company. The Report of Title substantially confirmed the information disclosed to the defendant and a copy of the Report was forwarded to the Assistant Regional Counsel of the General Services Administration.2 At the same time, the attention of Assistant Regional Counsel was directed to a letter of K. S. Harrison, Chief Counsel of the United States Coast Guard, dated October 1, 1947, which was uncovered at the time of the title examination. This letter indicated that the plaintiff had not acquired a marketable title to the property and that the usual procedure for disposition of such property when no longer needed for Coast Guard purposes was by formal declaration of abandonment of all right, title and interest acquired by the United States in its deed.
On October 17, 1956, in reply to the notification of the alleged defect in the plaintiff's title, Assistant Regional Counsel rejected the objection made to the plaintiff's title in the Report of Title and advised the defendant that the form of the deed used in acquiring the property in 1879 was sufficient to convey to the plaintiff a fee simple title. Then, by letter dated February 13, 1957, the defendant was notified of a date for settlement and advised that in the event the defendant failed to appear and close title, the plaintiff would take appropriate legal action. On February 19, 1957, the defendant notified Assistant Regional Counsel that he would not accept a deed to the property nor pay the balance of the consideration because the title was unmarketable, having reverted to the heirs of the plaintiff's grantor, Deborah Herbert, upon the abandoned use of the property as a Coast Guard site. In the same letter the plaintiff was notified that the defendant rescinded his bid and demanded the return of his deposit retained by the plaintiff unless the claims of the reversionary heirs were eliminated. Thereafter, no action was taken by either party until the institution of this litigation by the plaintiff.
It should be noted at this juncture that neither party to this action contests the existence of the contract of sale which was created on August 30, 1956,3 nor is it disputed that under the terms of the contract, it is incumbent upon the plaintiff to deliver a good or marketable title to the defendant.4 The fundamental issue to be determined by the Court is whether the plaintiff's title is marketable, or, in other words, whether the character of the plaintiff's title is such that the Court will compel the defendant to accept a conveyance of the property in question.
An examination of local authority with reference to applicable law induces the Court to concur in the observation made by Judge Price in Gaub v. Nassau Homes, Inc., 53 N.J.Super. 209, at page 217, 147 A.2d 73, at page 78 (A.D., 1958):
"The courts have employed various expressions to indicate the standard which should be applied in determining whether in a particular action for specific performance a defendant's challenge of a plaintiff's title is sufficiently serious and basic to enable such defendant to resist successfully an action to compel him to accept the conveyance."
To attempt to indulge in an exhaustive review of such authority in this opinion would be superfluous expatiation, for in the opinion in the Gaub case, Judge Price carefully reviewed the leading local cases on point and concluded:
* * *" (p. 223, 147 A.2d p. 81.) (Emphasis supplied.)
Suffice it to state that the courts have declined to grant specific performance in such instances where the defendant's objection to the plaintiff's title presents: a question of marketability reasonably debatable in court, in point of law or equity; a question too doubtful to be settled without litigation; a question not settled by previous authorities; or a question on which another judge might come to a different conclusion as might be indicated by reported decisions.5
The crux of the defendant's objection to the plaintiff's title is that under the deed of 1879 the plaintiff acquired from its grantor a title of lesser dignity than a fee simple; to wit, a qualified or limited estate, which reverted to the heirs of the plaintiff's grantor upon the abandoned use of the property as a Coast Guard site. The defendant argues that under the circumstances of this case if he were to accept a conveyance of the plaintiff's interest to the property in question, voluntarily or through a court order, it is either reasonably probable that he would be exposed to litigation thereafter, or, reasonable to believe that subsequently he would be obliged to institute an affirmative action to quiet title or otherwise. On the other hand, the plaintiff contends that under the deed of 1879 acquired from its grantor, the plaintiff possesses a marketable fee simple title which the defendant should be compelled to accept and pay the balance of consideration therefor in accordance with the contract of sale.
Basic to the issue at hand is the construction to be placed upon the instrument by virtue of which the plaintiff asserts title; and while it is not necessary for the Court to ascertain by judicial construction the extent and nature of the estate created and conveyed to the plaintiff by that instrument, the Court must examine the instrument to determine whether there exists a substantial question concerning the construction which might be doubtful or reasonably debatable.
The conveyance of 1897 from Deborah Herbert and her husband, Jacob B. Herbert, to the plaintiff was accomplished by means of an "indenture" which provides:
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