Case Law Summaries

Sunshine v. Del Sole

• Opinion Date: May 30, 2003
• Real Property Law
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CONTRACTS; EQUITABLE CONVERSION; SPOUSAL RIGHTS—Once a single person signs a contract to sell a home, some one who marries that person before closing does not become entitled to the benefit of the marital possession statute.

A divorced woman contracted to sell her home. After entering into a contract, but before the scheduled closing, she remarried her ex-husband. Prior to the remarriage, she asked to be relieved from the contract, but her buyer refused. “The contract provided for a bargain and sale deed with a covenant against grantor’s acts.” The buyer’s title insurance company insisted that the seller’s husband sign a quitclaim deed because, in its view, the seller’s marriage to, and occupancy by, her husband, constituted a title defect. The buyer refused to accept the deed from the seller without the husband’s signature. The buyer then commenced suit, “seeking specific performance with an affidavit of title and asserting various claims for damages.” A New Jersey statute states that for marriages after May 28, 1980, “every married person shall be entitled to joint possession [of the principal matrimonial residence] with his or her spouse during their marriage, which right of possession may not be released, extinguished or alienated without the consent of both spouses except by judgment of a court of competent jurisdiction.” The lower court accepted for the purpose of its ruling that the statute was applicable, but concluded that “[t]he statute was not intended to give somebody a convenient way of avoiding a contractual obligation. It was intended to protect the right of a married person so that the person to whom that person was married couldn’t unilaterally do something to defeat that interest in real property.” Taking note of the “pre-marriage efforts” of the seller to get out of the contract and the buyer’s detrimental reliance upon the contract, the lower court ordered the seller “to specifically perform the contract.” Further, exercising its statutorily authorized judicial power, the lower court extinguished any possessory right that the seller’s husband might have had under the statute. The Appellate Division affirmed. It pointed out that whatever title problems were created were clearly of the seller’s making and “capable of both remedy and prevention” by the seller and her husband. Consequently, the buyer, “who had no role in causing the problem, could not and should not have been relegated to the limited remedies provided by ... the contract.” Further, the Court looked carefully at the “statute’s use of the words ‘acquired,’ ‘owned,’ and ‘alienated,’” and held that the marital possession statute was clearly “applicable only to real property owned by at least one of the spouses during their joint occupancy.” The Court then looked to “the ancient, but still vital, doctrine of equitable conversion,” and held that the seller’s ownership of the property was “equitably converted into personality upon execution of the contract.” After signing the contract, the seller only had a claim against the buyer “for the agreed price, secured by the realty, but she was no longer its owner for purposes” of the marital possession statute. Consequently, the seller’s husband could not have acquired any interest in the marital home by virtue of the marriage that took place after the contract had been executed.

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