Friendly Consumer Discount Co. v. Foell

Decision Date12 March 1956
Docket NumberNo. A--94,A--94
Citation121 A.2d 434,39 N.J.Super. 410
PartiesFRIENDLY CONSUMER DISCOUNT CO., Plaintiff-Appellant, v. Charles R. FOELL and Freddy E. Foell, Defendants-Respondents. . Appellate Division
CourtNew Jersey Superior Court — Appellate Division

Abraham Greenberg, Camden, argued the cause for plaintiff-appellant.

Martin L. Haines, Mount Holly, argued the cause for defendants-respondents (Dimon, Haines & Bunting, Mount Holly, attorneys).

Before Judges CLAPP, JAYNE and FRANCIS.

The opinion of the court was delivered by


Plaintiff, a Pennsylvania corporation, secured a judgment by confession in the Burlington County Court on defendants' bond and warrant of attorney. The court, however, on defendants' motion vacated the judgment, and plaintiff appeals. The principal question is whether a judgment taken by confession may be entered on an unmatured indebtedness.

On February 23, 1955 plaintiff made a loan to defendants in the face amount of $2,160, which actually netted defendants $1,758 in cash after deducting certain charges and a discount on account of interest. On that day defendants signed a bond in plaintiff's favor in the penal sum of $4,320, conditioned to pay $2,160 One day after date. The bond contains this covenant:

'It is covenanted and agreed that in the event it should be necessary to take any proceedings to enforce judgment on this bond that an attorney fee of 15% Of the amount of the just debt hereinbefore set forth shall be included in the amount due upon this bond and judgment shall be entered therefor with such principal debt.'

At the same time defendants signed a warrant of attorney, embodied in a separate instrument, empowering plaintiff's counsel or any attorney of a court of law in New Jersey to confess judgment on the breach of the condition stated in the bond. Also at the same time defendants executed a chattel mortgage on a 1954 Pontiac, chattels of like nature and household goods, all by way of security for the loan. According to the mortgage, the loan is payable in 30 installments of $72 each (total $2,160), the first on April 6, 1955, the second 30 days thereafter, and so on, with a charge at the rate of 18% A year on the amount in arrears. The mortgage contains a statement that it is further secured by the mortgagors' 'judgment note * * * of even date, containing a confession of judgment' (as above stated, there was a bond and warrant--no judgment note).

Concededly there has been no default in the payment of any installment. Nevertheless on March 4, 1955, nine days after the making of the loan and three weeks before the first installment became due, the above mentioned judgment by confession was signed. The judgment was in the amount of $2,484, calculated as follows:

                Cash received on loan                  $1758.00
                Discount of 5% calculated on
                  $2160, the full face amount of
                  the loan for three years; we
                  are not informed how the plaintiff
                  arrived at the rate of 5%
                  nor why a 3 year period was
                  taken (there were 30 installments
                  one payable every 30
                  days over a period of a little
                  less than 2 1/2 years)                 324.00
                (If 5% interest had been calculated
                on the unpaid balances as they
                would have existed at the close
                of each 30-day period, had all
                installments been paid as they
                became due, the interest would
                have come to much less.)
                Attorney's fee amounting to 15%
                  of full face amount of the loan
                  $2160                                  324.00
                Amount advanced by plaintiff for
                  life insurance, not provided for
                  in bond, warrant or chattel
                  mortgage                                54.00
                Loan charges not provided for
                  therein                                 15.00
                Title fee, not provided for therein
                  (presumably the charge is for
                  searching the chattel mortgage
                  record; it was indicated that no
                  searching was undertaken here)           4.00
                Charge for recording note, not
                  provided for therein (apparently
                  in accordance with Pennsylvania
                  practice where a "judgment
                  note" is taken)                          5.00
                Amount of judgment                     $2484.00

Some weeks after the entry of judgment someone searched the title to the home of one defendant, and the latter was then apprised of the judgment. His affidavit, submitted on the motion to vacate the judgment, stated that he does not even recall signing the bond and warrant (though in fact he did sign them) and that he had not been advised that a judgment was to be entered against him forthwith. No answering affidavits were submitted. The County Court concluded that there was no justification for including in the judgment either the attorney's fee or the interest and therefore vacated the judgment.

The court held that since the judgment was entered for more than the correct amount, it should be vacated entirely. But where a judgment by confession is not rendered invalid either because of fraud or otherwise (and there is no such charge here), it is allowed to stand in the proper amount. Haddonfield National Bank v. Hipple, 110 N.J.L 271, 275, 164 A. 575 (E. & A.1933), Hickory Grill, Inc., v. Admiral Trading Corp., 14 N.J.Super. 1, 8, 81 A.2d 187 (App.Div.1951).

We must therefore examine the controversial questions which the trial court concluded it was not called upon to decide. The first of these questions may be disposed of summarily. We take it now to be settled that two or more writings, which are all parts of the same transaction, are to be interpreted together, even though they do not refer to each other. Lawrence v. Tandy & Allen, 14 N.J. 1, 6, 7, 100 A.2d 891 (1953); Colozzi v. Bevko, Inc., 17 N.J. 194, 207, 110 A.2d 545 (1955); Schlossman's, Inc., v. Radcliffe, 3 N.J. 430, 435, 70 A.2d 493 (1950); Veterans Loan Authority v. Rozella, 21 N.J.Super. 1, 90 A.2d 505 (App.Div.1952), a suit on a note, certification denied 10 N.J. 343, 91 A.2d 448 (1952); Skilton v. R. H. Long Cadillac L.S. Co., 265 Mass. 595, 164 N.E. 652 (Sup.Jud.Ct.1929); Restatement of Contracts § 235(c); 3 Corbin, Contracts, (1951) § 549; 3 Williston, Contracts (Rev. ed. 1936), § 628, 840. Hence even overlooking the reference in the chattel mortgage to a 'judgment note' (in the bond on which the judgment is taken, there is no reference to the chattel mortgage), we still conclude that the chattel mortgage, bond and warrant are to be interpreted together. American Auto Finance Co., Inc., v. Miller, 123 N.J.L. 1, 3, 7 A.2d 828 (Sup.Ct.1939). In the face of the above authorities, the following cases, insofar as they take a contrary view, must be deemed to be no longer law. Ryba v. Atlas Automobile Finance Corp., 121 N.J.L. 478, 480, 3 A.2d 447 (Sup.Ct.1939); Fidelity Acceptance Corp. v. Alloway, 127 N.J.L. 450, 23 A.2d 294 (Sup.Ct.1941); Superior Finance Corp. v. John A. McCrane Motors, Inc., 115 N.J.L. 401, 180 A. 842 (Sup.Ct.1935), affirmed on other grounds 116 N.J.L. 435, 184 A. 828 (E. & A.1939).

The parol evidence rule cannot be made so to subserve a lendor's own ends as to enable him--by setting forth one transaction in two separate instruments--to confer upon a single loan two different maturity dates, one of them false. Reading together the bond and chattel mortgage here, we have no doubt that the intent of the parties was to create a single indebtedness, with a single set of maturities, namely, those specifically set forth in the chattel mortgage. The debt was not intended to be payable both one day after date in full as provided in the bond, and also every 30 days in installments; it seems more likely that the provision in the bond does not truly state the parties' intention. Cf. Modern Security Co. of Philadelphia v. Fleming, 142 A. 649, 6 N.J.Misc. 730, 731 (Sup.Ct.1928). Indeed at the very time defendants obtained the loan, plaintiff delivered to them a 'Statement of Loan' showing:

'* * * Amount of note (in fact it was a bond)--$2160

'Payable (that is, the note or loan was payable) in 30 monthly installments of $72

'If default is made in payment of any installment, then at the option of the lender, The whole amount of the loan then unpaid shall at once become due and payable.' (Italics added.)

The plaintiff itself thereby represented that the whole amount of the bond was not payable unless there was a default in an installment. It is clear, then, that the loan had not matured at the time judgment was entered.

We come then to the main question, namely, whether a judgment can be taken by confession as to a debt that is owing but not payable. We are concerned not only with the principal sum of $1,758 which, as stated, was not payable at the time of the judgment, but also with the interest amounting to $324, no part of which seems to have been payable at the time of the judgment.

R.R. 4:57--2 provides that a plaintiff may not secure a judgment by confession unless he produces to the court an affidavit showing 'the amount then justly due to the plaintiff'; and it permits the entry of judgment for such amount as the court shall find to be 'due.' The rule was taken in part from N.J.S.A. 2:27--275 which however contained the words 'due And owing.'

Cases construing this statute, N.J.S.A. 2:27--275, and earlier statutes of this state to like effect, have held that these words 'due and owing' appearing therein have reference to any indebtedness, even though the day of payment has not arrived. Scudder v. Coryell, 10 N.J.L. 340, 345 (Sup.Ct.1829); Hoyt v. Hoty, 16 N.J.L. 138, 143 (Sup.Ct.1837); Caskill & Sons v. Buckman, 95 N.J.L. 14, 17, 116 A. 692 (Sup.Ct.1890), affirmed Strong v. Gaskill, 53 N.J.L. 665, 25 A. 19 (E. & A.1891); cf. Ely v. Parkhurst, 25 N.J.L. 188, 192 (Sup.Ct.1855), reversed 27 N.J.L. 555 (E. & A.1858); see Smith v. Weaver, 75 N.J.L. 31, 34, 66 A. 941 (Sup.Ct.1907), affirmed 76 N.J.L. 584, 70 A. 1101 (E. & A.1909). Contra, Modern Security Co. of Philadelphia v. Fleming, 142 A. 649, 6 N.J.Misc. 730 (Sup.Ct.192...

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