Opinion
Argued February 4, 1947 —
Decided April 24, 1947.
On appeal from a judgment of the Supreme Court, entered on order of Circuit Court Judge Ackerson, sitting without a jury by consent of the parties. Judge Ackerson filed the following opinion:
"This case is submitted to the court without a jury, upon the facts alleged in the complaint as supplemented and amended by written stipulation and exhibits, to obtain a declaratory judgment ( R.S. 2:26-66, et seq.) respecting plaintiff's claim to an easement, during the life of one May E. Van Saun, in a concrete driveway over premises now owned by the defendant and known as Nos. 7 and 9 Boyd Avenue, Jersey City, and leading from said avenue to garages in the rear of adjoining premises No. 5 now owned by the plaintiff.
"It appears from the stipulated facts, which are adopted as the factual findings of the court, that in 1924 lot No. 5, upon which stood a frame dwelling occupying the entire width of said lot, was owned by May E. Van Saun. Lots 7 and 9 were then owned by Charles Miller, and the building or buildings thereon left enough space for a driveway along the westerly line of lot No. 9.
"At that time said owners caused to be erected across the rear of lots 5, 7 and 9, which are contiguous, a series of brick garages extending from the easterly line of lot 5 to the westerly line of lot 9, and so constructed as to constitute a single unit or structure consisting of a single and double garage on lot 5 and two single and two double garages on lots 7 and 9. At the same time the concrete driveway in question was constructed from Boyd Avenue along the westerly line of lot 9 to the rear thereof and thence, for a width of 15 feet in front of said garages, from the westerly line of lot 9 to the easterly line of lot 5, and this driveway constitutes the only means of ingress and egress to and from the garages located in the rear of lot 5, and is at all times visible and apparent on casual inspection.
"It was then orally agreed between said owners that May E. Van Saun had an easement and right of way over said driveway to her garages in the rear of lot 5, and it was so used by her.
"On December 18th, 1928, said Miller died testate devising, by will duly probated, premises 7 and 9 to said May E. Van Saun for her life, remainder to her three children.
"Thus May E. Van Saun, while possessed of the fee-simple title to lot 5, became possessed of a life estate in premises 7 and 9. On March 9th, 1932, she conveyed the fee in lot 5 to Thomas L. Biggane by deed, duly recorded, in which it was specifically provided that a right of way was not acquired by said grantee over premises 7 and 9. So we see that whatever easement may have existed theretofore in favor of lot 5 was thereby expressly extinguished.
"It is unnecessary from this point on to trace every step in the devolution of the title to lot 5 into the present plaintiff, and of lots 7 and 9 into the present defendant. Suffice it to say that the plaintiff claims the easement in question by virtue of a written grant dated June 9th, 1933, made by said May E. Van Saun, who had only a life estate in the servient tenement (lots 7 and 9), to The New Jersey Title Guarantee and Trust Company, then owner of the adjoining lot No. 5, which company, on conveying the last mentioned lot, assigned said grant to its grantee, and any right thereunder are now possessed by the plaintiff herein who is the present owner of lot 5. Although this grant of the easement in question was sealed and duly acknowledged, neither it nor the aforesaid assignment thereof were ever recorded pursuant to R.S. 46:16-1-14. Whatever effect this grant may have is limited, of course, to the lifetime of May E. Van Saun who is still living.
"On September 5th, 1934, May E. Van Saun, life tenant, along with the owners of the remainder in fee, mortgaged lots 7 and 9 to the Home Owners' Loan Corporation. On December 20th, 1939, said corporation foreclosed this mortgage without making either The New Jersey Title Guarantee and Trust Company, the original grantee of the easement in question, or the present plaintiff, who then held title thereto, parties to said foreclosure proceeding. As the result of the decree in said foreclosure proceeding, lots 7 and 9 were sold to the Home Owners' Loan Corporation which on September 15th, 1943, conveyed them to the present defendant. Both deeds being duly recorded.
"No grant of an easement can arise by implication where there is an express contract relating to the matter, Georke Co. v. Wadsworth, 73 N.J. Eq. 448 , 454; Crouse v. Sloan, 99 Id. 879; 28 C.J.S. 687, § 30; Ibid. 696, § 35; 19 C.J. 914, § 102. Therefore the legal question thus presented is whether the aforesaid written and duly acknowledged but unrecorded grant of the easement in question was cut off and voided by the foreclosure of the subsequent mortgage covering the alleged servient tenement (lots 7 and 9) in which foreclosure proceeding no one claiming title to nor an interest in said easement was brought in nor appeared as a party thereto.
"R.S. 46:22-1 provides as follows: `Every * * * instrument of the nature or description set forth in section 46:16-1 of this title shall, until duly recorded or lodged for record * * *, be void and of no effect against * * * all subsequent bona fide purchasers and mortgagees for valuable consideration, not having notice thereof, whose deed * * * or whose mortgage shall have been first duly recorded or registered; but any such * * * instrument shall be valid and operative, although not recorded, except as against such subsequent * * *, purchasers and mortgagees.'
"It is settled that a written grant of an easement in real estate is an instrument covered by the aforesaid statute. Dahlberg v. Haeberle, 71 N.J.L. 514; 59 Atl. Rep. 92.
"The plaintiff contends that her unrecorded grant of the easement in question is not void, under the terms of the aforesaid statute, as against the present defendant. The claim being that the visible and apparent character of the driveway charged the defendant, as well as his grantor, Home Owners' Loan Corporation, with constructive notice of the easement herein contended for, thereby bringing the grant thereof within the exception to unrecorded instruments voided by the statute.
"Undoubtedly this contention would have great merit if the defendant's grantor had not acquired title to lots 7 and 9 through the foreclosure of a mortgage thereon which fact calls for the application of section 58 of our Chancery Act ( R.S. 2:29-27) which provides as follows:
"`In any suit for the foreclosure of a mortgage * * *, all persons claiming an interest in or an encumbrance or lien upon such property, by or through any * * * instrument, which, by any provision of law, could be recorded, * * *, and which shall not be so recorded, * * * at the time of the filing of the bill in such suit, shall be bound by the proceedings in such suit, so far as such property is concerned, in the same manner as if he had been made a party to and appeared in such suit, and the decree therein made against him as one of the defendants therein; but such person, upon causing such * * *, instrument to be recorded, * * * as provided by law, may cause himself to be made a party * * * by petition, * * *.'
"It will be observed that no exception is made in this statute in favor of an encumbrancer whose encumbrance, though unrecorded, is known to the complainant who institutes the foreclosure proceeding. McCrea v. Newman, 46 N.J. Eq. 473 (at p. 476). Nor is an exception made in favor of an unrecorded encumbrance which antedates the mortgage being foreclosed, for the act provides that all persons claiming any interest in the property by or through `any' recordable instrument which has not been recorded shall be bound by the foreclosure proceedings as though he had been made a party, `and the decree therein made against him as one of the defendants therein.' (Italics supplied.)
"That the statute requires action on the part of an unrecorded encumbrancer to protect his interest in the event of the foreclosure of a mortgage on the premises is expressed in Raymond v. Post, 25 N.J. Eq. 447, 452, where the court said: `The provisions of that act require diligence and action on the part of those who may have claims against mortgaged premises, which may be recorded, registered, entered or filed in any public office in this state, to protect their interest in those premises in case of proceedings for foreclosure. They are to put their deed or mortgage or other instrument under which they claim a title to or lien upon mortgaged real estate, on record. * * * If, after a suit commenced, they desire to intervene to protect their rights, they must record, register or file the instrument under which they claim, and then on application, may be admitted to defend.'
"In Marcy v. Larkin, 99 N.J. Eq. 429 ; 132 Atl. Rep. 90, our Court of Errors and Appeals adopted the opinion of Vice-Chancellor Leaming, rendered in the Court of Chancery, wherein he stated the purpose of this statute to be as follows: `* * * the statute is intended to perfect the title at foreclosure in accordance with the public records as such public records disclose the existence of liens and encumbrances, and to forever protect the title made under the sheriff's sale as against any liens not disclosed by the public records, * * *.' In view of this purpose the court held that title acquired at a mortgage foreclosure sale was not affected by unrecorded contracts for the sale of mortgaged premises, even if the mortgagee, in the foreclosure suit, actually or constructively knew before the bill was filed of the purchaser's possession under said unrecorded contracts. See, also, Leonard v. The New York Bay Co., 28 N.J. Eq. 192; Sibell v. Weeks, 65 Id. 714, and Stiles v. Galbreath, 69 Id. 222 (at pp. 232 and 233). In the latter case Vice-Chancellor Grey, referring to the aforesaid statute, said (at p. 233): `It relieves the complainants from any obligation to make parties of persons holding liens against the mortgaged property not of record, and binds those parties from thereafter asserting claims against that property, * * *. * * * I think the terms of the statute apply to make the foreclosure decree binding "so far as the property is concerned," irrespective of the knowledge of the complainants of the existence of the outstanding lien claims, * * *.'
"The case of Pflieger v. Holland Furnace Co., 114 N.J.L. 43, does not overrule nor modify the interpretation of R.S. 2:29-27, with respect to the scope of its effect upon unrecorded or unfiled liens and encumbrances, as expressed in the last above cited cases — particularly Marcy v. Larkin. In the Pflieger case the court stated that there was no evidence that the plaintiffs (former mortgagees and purchasers of the realty on foreclosure of their mortgage) had any notice, at the time of foreclosure, of an unfiled contract of conditional sale of the furnace attached to the mortgaged premises. This lack of notice plus the operation of R.S. 2:29-27 was held to cut off the conditional vendor's claim. However, the effect of the aforesaid statute, if there had been actual or constructive notice of said unfiled contract, was not before the court for decision, and the court's remarks with respect thereto are obiter dicta. The fact that the contract of conditional sale had not been filed as required by the Conditional Sales Act ( R.S. 46:32-13, 14) at the time of the institution of the foreclosure suit was sufficient of itself to sustain the decision under R.S. 2:29-27, as interpreted in the Marcy case, regardless of the question of actual or constructive notice of said unfiled contract. No mention is made of the Marcy case in the course of the opinion.
"The interpretation of the purpose and effect of R.S. 2:29-27, as expressed in Marcy v. Larkin, supra, is controlling here, with the result that plaintiff's unrecorded grant of the easement in question was cut off by the foreclosure proceeding through which this defendant derived his title to lots 7 and 9, notwithstanding that he and his grantor (complainant in said foreclosure proceedings) may have had constructive notice of said easement prior to the filing of the foreclosure bill.
"I therefore find and declare that the plaintiff is not entitled to an easement, during the life of May E. Van Saun, in the existing concrete driveway extending from Boyd Avenue, Jersey City, New Jersey, along the westerly line of lot No. 9 to the rear thereof, and thence easterly in front of the garages in the rear of lots 9 and 7 to the garages in the rear of lot No. 5 on said avenue, for the purpose of ingress and egress to and from said last mentioned garages and said avenue.
"A form of postea may be submitted in accordance with the conclusion thus reached."
For the appellant, Morris E. Barison ( Fred E. Riethmuller, of counsel).
For the respondent, Bennett A. Robbins ( Abraham J. Slurzberg, of counsel).
The judgment under review will be affirmed, for the reasons expressed in the opinion of Judge Ackerson.
For affirmance — THE CHANCELLOR, CHIEF JUSTICE, PARKER, BODINE, DONGES, COLIE, WACHENFELD, EASTWOOD, WELLS, RAFFERTY, DILL, FREUND, McGEEHAN, McLEAN, JJ. 14.
For reversal — HEHER, J. 1.