In re N.J. Refrigerating Co.

• Decision Date: 12 September 1924
• Citation: 126 A. 174
• Parties: In re NEW JERSEY REFRIGERATING CO.
• Court: New Jersey Court of Chancery

126 A. 174

In re NEW JERSEY REFRIGERATING CO.

Court of Chancery of New Jersey.

Sept. 12, 1924.

(Syllabus by the Court.)

In the matter of the dissolution of the New Jersey Refrigerating Company. On petition for confirmation of receivers' sale. Sale confirmed, and claim for broker's commission referred to receivers.

See, also, 122 Atl. 832.

J. Henry Harrison, of Newark, for receiver.

Edward Maxson, of Summit, for Reilly Stevedoring Company, Inc., and Samuel Lesser.

Perkins & Drewen, of Jersey City, for Thomas A. Lembeck and another, stockholders.

Fisk & Fisk, of Jersey City, for Ida L. Bowen, stockholder.

Merritt Lane, of Newark, for certain other stockholders.

WALKER, Ch. On July 17, 1924, an order was made in the above-stated cause that Frank J. Bock and Edward H. Wright, receivers of the defendant corporation, be directed, subject to the approval of this court, to negotiate and enter into a contract for the sale of certain property of the defendant company (describing it). In pursuance of this order the receivers issued invitations for bids, and in response received sealed bids, one from the John J. Reilly Stevedoring Company, Inc., which appeared to the receivers to be the highest, and it was accepted and a contract entered into between them and the company, July 31, 1924, which contract recited that in consideration of $550,000 they agreed to sell to that company the property, describing it, $25,000 to be paid upon the execution of the agreement, $193,583 on the delivery of the deed, and the balance of $331,417, being the amount outstanding and unpaid on the mortgage, and subject to the lien thereof. The agreement contained a clause that settlement should be made 90 days after the approval by this court of the terms of the contract, and it contained this stipulation:

"It is hereby understood and agreed that Samuel Lesser is the broker who effected this sale, and said parties of the first part (the receivers) hereby agree to pay said broker a commission of five (5) per cent. for the sale of the plant and a commission of two and one-half (2 1/2) per cent. for the sale of the other parcels, or such other commission as may be approved by the court of chancery, if and when this sale is consummated and the purchase price paid."

And it contained this still further provision:

"And it is further agreed, that this agreement is made subject to the approval of the court of chancery of New Jersey and shall be consummated in accordance with the statutes in such case made and provided, and under the direction of the said court of chancery."

On August 19, 1924, an order to show cause why the receivers should not consummate the sale of the property included in the agreement of July 31st with the John J. Reilly Stevedoring Company, Inc., for the gross consideration of $550,000, and why the receivers should not be directed to pay the real estate broker who negotiated the sale the commissioners mentioned in the agreement, was returnable, having been served upon the stockholders of the defendant company and the Commercial Trust Company, the mortgagee trustee; and Charles T. Brown, in open court, having offered to pay the sum of $560,000, without brokerage, for the property, an order was entered that the agreement of sale of July 31, 1924, be not then consummated, and that no commissions be then allowed to the broker who effected said contract, and it was further ordered that the receivers advertise for sale at public auction on Thursday, August 28, 1924, the real estate and personal property referred to and more particularly described in the petition filed August 2, 1924, and the abovementioned order to show cause made thereon, and that they be directed, subject to the approval of this court, to enter into a contract with the purchaser at that sale and report the same for confirmation on Tuesday, September 2, 1924. And now, on the return of the last-mentioned order to show cause, the receivers, on notice to the parties interested, report that pursuant to the order of August 19, 1924, they offered the property for sale at public vendue, comprising the plant of the defendant company and other property therein described, and that Charles T. Brown then and there bidding the sum of $625,000 for the premises, and no one bidding so much or more for the same, the property was struck off and sold to him for that sum, he being the highest bidder therefor. The conditions of sale were that the property comprising the plant would be sold subject to the mortgage bond issue, on which there was then due approximately $332,000, that the successful bidder would be required to sign a contract, subject to the approval of this court, which contract was signed and annexed to their report.

The cash for the equity of redemption under the Reilly bid at private sale reported August 19, 1924, is $191,750, and that of the Brown bid, at public sale, reported September 2, 1924, is $293,000, making a difference of $101,250 in favor of the Brown bid, being over 52 per cent. excess.

On August 19, 1924, on the return of the order to show cause, and when the bid of the John J. Reilly Stevedoring Co., Inc., was reported, that concern was represented by a New York attorney, who was not associated with any solicitor of our state, and, having no audience in our courts, he could not be introduced pro hac vice. The order of that date calling for a resale at public vendue was not opposed by any one who had standing before the court.

The Reilly Stevedoring Company did not bid at the public sale, but was represented before the court on September 2, 1924, by counsel on the return of the order to show cause and the report of the receivers of the sale of August 28, 1924, and insisted...