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Wamco XV Ltd. v. Farrell

301 N.J. Super. 73, 693 A.2d 938 (App. Div. 1997)

MORTGAGES; MATRIMONIAL; POSSESSION—The Court construes the meaning of the transition date of May 28, 1980 in the statute that affords spouses the right to possession of marital residences.

In April, 1990, a couple was married and immediately moved into a house the husband purchased with his first wife in 1978. Pursuant to the divorce agreement, the former wife had quitclaimed her interest in the premises. In July, 1991, the husband granted a mortgage on the house to a bank. The mortgage was signed by the husband but not by the wife. Upon a subsequent default, forbearance agreements were entered into by all parties. After the forbearance agreements had expired, the bank’s successor instituted a foreclosure action which named the wife in order to foreclose any interest she might have had as the husband’s spouse and as joint possessor of the property. The wife filed an answer and moved for summary judgment claiming her interest is superior to the bank’s successor and, according to statute, as a spouse she is entitled to joint possession of the principal matrimonial residence. She alleged that her right of possession could not be released, extinguished or alienated without the consent of both spouses. The Chancery Division granted summary judgment to the wife and the bank’s successor appealed, claiming the statute relied on by the wife was inapplicable because it only applies to property purchased on or after May 28, 1980.

The Appellate Division upheld the lower court decision, noted that the predecessor statute did not contain a date restriction, and opined that the May 28, 1980 date in the new version was not a change to the prior statute, but simply was to coincide with the date of abolition of the dower and courtesy laws. The Court defended this decision by citing numerous decisions holding that there shall not be imputed to the legislature an intent to change established law in the absence of clear intent. The bank’s successor further claimed the applicable statute required contemporaneous acquisition of the property by both spouses, and since the husband acquired the property before marrying the wife, the statute would be inapplicable. The Court rejected this argument, stating that the mortgage must also be placed on the property prior to marriage for a creditor to avoid a spouse’s right to joint possession.


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