Barber v. Jacobs

753 A.2d 430 (2000)

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Nature of the Case

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Facts

P was moving from Canada and made an offer to D to purchase property and signed a contract with a purchase price of $3,275,000 and a closing date of August 8, 1994. The contract contained a mortgage contingency clause, which provided that the 'agreement [was] contingent upon P obtaining a commitment for a loan, to be secured by a first mortgage on the premises, in an amount not in excess of $1,300,000 . . . .' The mortgage contingency required P to 'make prompt application for such a loan' and 'to pursue said application with diligence.' P paid a 10 percent deposit amounting to $327,000, which was held by D's attorney, pursuant to the contract. A mortgage application was forwarded to The Putnam Trust Company of Greenwich (bank) on June 20, 1994, disclosing the plaintiff's monthly income of $ 210,000 and net worth in excess of $ 4,000,000. On June 30, the bank loan committee approved the loan but did not establish an interest rate, nor did it issue a formal mortgage commitment. Because of wetland problems, the bank reversed the loan approval and issued a written denial because the property failed to comply with agency standards for wetlands. P requested the return of the deposit because the contract was void under the mortgage contingency clause. D refused. P looked at and closed on another home. P sued D and got a verdict in his favor. The trial court found that P made sufficient efforts on the mortgage. D appealed.