Simonson v. Z Cranbury Associates

The critical issue posed by this appeal is whether a developer who defaults on payments due on a purchase money note secured by a nonrecourse mortgage on the residential tract to be developed is entitled to enforce, by way of counterclaim in a foreclosure action, a partial-release provision in the mortgage entitling the developer to the release of acreage having a value substantially equivalent to the down payment at closing. An oversimplified statement of the issue is whether the mortgagor’s default in payments due on the underlying note relieves the mortgagee of its obligation to honor the…