Fort Lee Savings & Loan Ass'n v. Libutti

254 A.2d 804, 106 N.J. Super. 211, 1969 N.J. Super. LEXIS 451

• Court: New Jersey Superior Court Appellate Division
• Decided: June 30, 1969
• Status: Published

Opinions

Per Curiam.

On December 3, 1964 defendants Joseph R. LiButti and Joanne LiButti, husband and wife, executed a purchase money bond and mortgage to secure a loan of $42,000 at 6%. They defaulted, in installment payments and, following a foreclosure judgment entered July 17, 1967, the property was ordered sold. The sale resulted in a surplus of $18,440.12, which was deposited with the court.

The LiButtis were tenants by the entirety of the property in question. Defendant Mitchell, Hutchins & Co., Inc., had recovered a judgment on April 27, 1964 in the amount of $5,570.49 and costs against Joseph LiButti — this prior to the execution of the bond and mortgage mentioned. Mitchell, Hutchins applied to the court for payment of its judgment out of the surplus. That application was eventually denied on the basis of Servis v. Dorn, 76 N. J. Eq. 241 (Ch. 1909), and the decision of this court in Dorf v. Tuscarora Pipe Line Co., Ltd., 48 N. J. Super. 26 (1957) (dictum, at page 32).

In Servis Vice-Chancellor (later Chancellor) Walker held (76 N. J. Eq., at page 243) that surplus money arising from a foreclosure sale of real property held by the entirety “stands in the place of the land itself in respect to liens thereon or vested rights therein.” The holding of that case has withstood the test of time. See Morris v. Glaser, 106 N. J. Eq. 585, 592 (Ch. 1930), affirmed o.b. 110 N. J. Eq. 661 (E. & A. 1932); Vineland S. & L. Ass’n v. Felmey, 12 N. J. Super. 384, 392 (Ch. Div. 1951); Danes v. Smith, 30 N. J. Super. 292, 301—302 (App. Div. 1954). See also, 4 Pomeroy, Equity Jurisprudence (5th ed. 1941), § 1167, p. 495; 7 N. J. Practice (Clapp, Wills and Administration) (3d ed. 1962), § 1781, p. 521, and Annotation, “Estate by entirety in personal property,” 64 A. L. R. 2d 8, 60 (1959).

We agree with the Chancery Division judge that Mitchell, Hutchins is not presently entitled to satisfaction of its judgment out of the principal of the surplus monies. The principal will be held under the control of the court to await severance of the estate by the death of Joseph or Joanne LiButti, “when it will or will not become available * * * accordingly as the judgment debtor [Joseph] survives or dies before the other tenant by entirety [Joanne].” Servis v. Dorn, above, 76 N. J. Eq., at page 245.

Affirmed.