Massari v. Einsiedler., A-132-48.

• Court: Superior Court of New Jersey
• Citation: 65 A.2d 538
• Docket Number: A-132-48.
• Parties: MASSARI et al. v. EINSIEDLER.
• Decision Date: 13 April 1949

65 A.2d 538

MASSARI et al.
v.
EINSIEDLER.

A-132-48.

Superior Court of New Jersey, Appellate Division, Part B.

April 13, 1949.

Appeal from Superior Court.

Suit by Joseph Massari and others, a co-partnership doing business under the name of Massari Brothers Machine Company, against Charles Einsiedler, for balance due on contract for purchase of business and for injunction. From a judgment for plaintiffs and from an order dismissing petition and supplemental petition filed by defendant, the defendant appeals.

Affirmed.

65 A.2d 539

Before McGEEHAN, Senior Judge, and DONGES and COLIE, JJ.

Kenneth C. Hand and Milton A. Feller, both of Elizabeth, for appellant.

David Stoffer and Arthur L. Abrams, both of Newark, for respondents.

COLIE, Judge.

Plaintiffs instituted suit alleging in the first count of the complaint that they contracted to sell their business to defendant for $364,000. In pursuance of the contract, they sold the business, together with the name Accurate Bushing Company, and that the defendant paid $194,586.65 with interest, leaving an unpaid balance of $170,584.26 and demanded judgment in that amount. In the second count of the complaint, plaintiffs sought to enjoin and restrain defendant from disposing of the stock of Accurate Bushing Company so long as the balance of the purchase price was unpaid, and also sought to enjoin and restrain the defendant against mortgaging or disposing of any assets of Accurate Bushing Company except in the usual course of business until the full purchase price was paid. Annexed to the complaint was a copy of the Sales Agreement dated September 16th which recited that plaintiffs owned certain machinery, tools, book accounts, trade marks and patent rights which defendant wished to purchase on a deferred payment plan, that plaintiffs desired to continue their business known as Massari Brothers Machine Co. but to discontinue the manufacture of bushings under the name Accurate Bushing Company which defendant desired to use. The contract provided for payment of $10,000 on the signing of the sales agreement, $140,000 within ten days and the balance over a period of two years with interest at 2 1/2%, provided a substantial payment is made in one year. Paragraph 3 of the sales contract provides as follows:

‘3. The Purchaser promises and agrees that upon acquiring title to the foregoing, he shall forthwith cause a New Jersey corporation known as ‘Accurate Bushing Company’ to be formed and convey all the foregoing assets to said corporation in exchange for the capital stock thereof, and to enter into a security trust agreement in favor of Sellers whereby the Purchaser agrees to hold the proceeds of sale of any shares of stock of said corporation as trustee for Sellers, to pay the same in reduction of the balance of purchase price owed to the Sellers as aforesaid, it being further provided that the Purchaser shall have full control otherwise to operate said corporation, providing he shall dispose of said shares in such a manner as to protect the security of the Sellers, it being further understood and agreed that the Purchaser will, as soon as is in his sole opinion practicable, cause a public sale of securities to be made under Section ‘A’ of the Securities Act, in the maximum amount of $300,000.00, and to apply such net proceeds as are realized therefrom by the Purchaser to the reduction of said balance of the purchase price aforesaid, and the shares of said corporation shall be held in the name of Charles S. Einsiedler at all times until sold as aforesaid.'

Upon filing of the complaint, the court issued a temporary restraint against disposing of any shares of Accurate Bushing Company except in accordance with paragraph 3 above quoted. Subsequently the court signed an injunctive order to the same effect. Thereafter, the defendant filed an answer to the first count, admitting the amount due but setting up that he had made tender in accordance with the...