111 N.J. Eq. 129 | N.J. Ct. of Ch. | 1932
Complainants sue to obtain a decree requiring defendants to deliver up for cancellation a certain bond made by complainants to defendant Grace Realty Company and a purchase-money mortgage to secure payment of said bond. Complainants, *130
desiring to purchase a house in Hoboken for residential purposes, were recommended to Claus Kruger, a real estate broker, as a reliable man to represent them as agent. Complainants met Kruger by appointment in the latter part of January, 1931. At such meeting Kruger was accompanied by one Sol Rosenbaum whom he introduced to complainants as a real estate broker associated with him. Complainants engaged said parties as their agents to negotiate a purchase of a residential property for them. Kruger and Rosenbaum showed complainants a house situate on Tenth street in the city of Hoboken in which complainants became interested. Kruger inquired of complainants as to how much they would be willing to pay for said property, and complainant Walter Morris replied he would not give more than $10,000, and requested Kruger to endeavor to purchase same for as low a price as possible, not exceeding $10,000. Kruger asked that the sum of $100 be entrusted to him to be used as a down-payment on the purchase in the event that he would be able to effect a deal with the owner of the property. Thereafter, on February 6th, complainant Walter Morris delivered to Kruger a check for $100 for such purpose. It developed that said house could not be bought for complainants. On February 20th Kruger and Rosenbaum interested complainants in a house known as No. 1112 Bloomfield street, Hoboken, which Kruger stated the owners asked $14,000 for. Complainants informed Kruger and Rosenbaum they would not pay such price and directed Kruger to negotiate for the purchase thereof in complainants' behalf for as low a purchase price as possible. The following day Kruger informed complainant Walter Morris that $12,500 was the lowest price the Bloomfield street property could be bought for, and Kruger was authorized by complainants to purchase the property for them at that figure, and to make use of the $100 check previously given to him as a down-payment on the purchase price. As soon as complainants definitely informed Kruger that they would buy the Bloomfield street property for $12,500 Kruger and Rosenbaum informed the defendant Leddy *131
thereof, and then introduced Leddy to George Wenz, the owner of the property. Leddy contracted to purchase the property from Wenz for $10,350, paying $100 as a down-payment on the purchase price, taking the contract in the name of Grace Realty Company as vendee. On the afternoon of the same day the contract was signed Kruger turned over to Leddy the aforesaid $100 check which complainant Walter Morris had previously delivered to Kruger. The proofs herein disclose that the defendant Leddy in conjunction with Kruger and Rosenbaum, conspired to defraud complainants of the sum of $2,150, being the difference between what the Bloomfield street property was purchaseable for from Wenz and the amount which complainants were induced to contract to pay to Leddy's corporation, Grace Realty Company, when on February 26th complainant Walter Morris for the first time met the defendant Leddy whom Kruger introduced to Morris as the owner of the property 1112 Bloomfield street. Kruger suggested that they go to the office of the lawyer who was then representing Leddy (such lawyer was not of the firm of Leddy's solicitors of record in the case sub judice) to sign a contract for the purchase of the property. The parties went to said lawyer's office and the lawyer presented to Morris a contract which had already been prepared between Grace Realty Company, as vendor, and complainant Walter Morris, as vendee, which the parties executed. The purchase price mentioned in said contract was $12,500, payable $500 on the execution of the contract; $8,000 by assuming a first mortgage then a lien upon the property; $2,500 by executing a bond with a purchase-money mortgage to secure same; $1,500 in cash upon delivery of the deed. Upon the execution of said contract complainant Walter Morris delivered to the defendant Leddy his check for $400 payable to the order of Grace Realty Company, which, with the sum of $100 previously turned over by said complainant to Kruger, and which Kruger had previously turned over to Leddy, made the initial payment on the contract. The title was closed March 16th. Shortly after complainants had taken possession of the Wenz *132
property they learned that the defendant Grace Realty Company was not the owner thereof when they engaged to purchase same through their agent Kruger and of their being defrauded of $2,150, and of the means whereby Kruger and Rosenbaum had conspired with the defendant Leddy whereby he should effect a purchase of the property from Wenz for $10,350 through the medium of the defendant Grace Realty Company and effect a resale of the property to complainants through Leddy's said corporation for $12,500. On learning of the transaction as above stated the complainant Walter Morris made a demand upon the defendant Leddy, and through him upon the Grace Realty Company, to surrender and deliver up for cancellation the aforesaid bond and purchase-money mortgage of $2,500. Defendants refused to comply with said demand, and thereupon the instant suit was instituted. It is evident from the proofs herein that complainants were defrauded in the transaction in question, and that the fraud perpetrated upon them was effectuated through the dishonest practices of Kruger and Rosenbaum whom complainants implicitly relied upon as their agent. No consideration whatever passed from the defendant Grace Realty Company to the complainants for the $2,500 bond and mortgage mentioned. The transaction with respect thereto was such as a court of conscience will not countenance. This court is the proper forum for complainants to resort to for relief from the fraudulent bond and mortgage in question. Cornish v. Bryan,