Howard Savings Bank v. Brunson

582 A.2d 1305 (1990)

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Nature of the Case

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Facts

In January 1986, D purchased a parcel of property. The deed for the property was properly recorded pursuant to N.J.S.A. 46:21-1 and indexed pursuant to N.J.S.A. 46:20-4 on January 24, 1986. In March 1986, D borrowed $50,000 from P secured by a mortgage which was properly recorded on May 1, 1986. This mortgage was not properly indexed until February 3, 1988. D subsequently executed two mortgages to Rols Capital Company on April 11, 1986, and on May 14, 1986. On May 20, 1986, D executed and delivered a mortgage on the property to Myron Pokross. On the same day, D executed and delivered a deed for the property to Pokross it was recorded in the office of the register of Essex County on July 7, 1988. On October 6, 1987, D executed and delivered a deed for the property to Jesus Ijalba and Celeste Ijalba (Ds), which deed was properly recorded in the office of the register of Essex County on November 4, 1987. On October 6, 1987, Ijalba executed and delivered a mortgage covering the subject premises to defendant Chrysler First Financial Services Corporation (Chrysler). This mortgage was also properly recorded on November 4, 1987. On the basis of a thorough title search and an affidavit of title executed by D on October 5, 1987, representing that he had not allowed any legal interest to be created that would affect the ownership or use of the property, Chicago Title Insurance Company (Chicago Title) issued a title insurance policy to Chrysler. On May 19, 1988, P brought a foreclosure action against Chrysler and Ds, claiming that the proceeds of D's sale of the premises were not applied to the mortgage held by P and that its mortgage had priority over all subsequent encumbrances of the property. Both parties moved for summary judgment.