Piechowski v. Matarese
| Decision Date | 13 March 1959 |
| Docket Number | No. L--10486,L--10486 |
| Citation | 54 N.J.Super. 549,149 A.2d 632 |
| Parties | William J. PIECHOWSKI, Plaintiff, v. Frank R. MATARESE et al., Defendants. |
| Court | New Jersey Superior Court |
Martin L. Haines, Mt. Holly, argued the cause for plaintiff (Dimon, Haines & Bunting, Mt. Holly, attorneys).
Burton Peskin, Trenton, argued the cause for defendants (Fishberg & Peskin, Trenton, attorneys).
McGANN, J.C.C. (temporarily assigned).
This matter comes before the court on an order to show cause as a result of a levy made pursuant to N.J.S. 2A:17--57 et seq., N.J.S.A.
The plaintiff seeks to obtain an order against Joseph F. Matarese, Frank R. Matarese and James Matarese, Jr. These men were defendants, along with the Bestby Products Corporation, in an action by the plaintiff wherein he recovered a judgment against the said corporation in the amount of $2,950, and the court dismissed the actions against the individual defendants Matarese.
The plaintiff contends that the individual defendants, who were officers of Bestby Products Corporation, during their tenure did loan corporate monies to two other officers, namely Scanlan and Greenberg, in the total amounts of $2,547.98.
The facts additionally indicate that James Matarese, the president of Bestby Products Corporation, had loaned the corporation $4,200 in 1954 and was repaid said amount in two installments: one in November 1954 in the amount of $1,500, and the balance of $2,700 in March 1955. The facts further show that in March 1955 the corporation did not have sufficient liquid assets to pay its just creditors and had been operating at a loss. The facts also indicate that the plaintiff had loaned the corporation the sum of $5,000 and was repaid in part, i.e., the sum of $2,500.
As indicated above, this action is brought under authority of N.J.S. 2A:17--57 et seq., N.J.S.A. N.J.S. 2A:17--63, N.J.S.A., provides in part as follows:
'After a levy upon a debt due or accruing to the judgment debtor from a third person, herein called the garnishee, the court may upon notice to the garnishee and the judgment debtor, And if the garnishee admits the debt, direct the debt, to an amount not exceeding the sum sufficient to satisfy the execution, to be paid to the officer holding the execution or to the receiver * * *.' (Italics supplied.)
The proponent of the motion maintains that under the authority of the above cited section he has the right to collect the amount of his judgment from the various officers of the corporate debtor, Bestby Products Corporation, because they were responsible for making loans to stockholders or officers of the corporation or asdividually are jointly and severally liable senting to the making of such loans, and into the extent of such loans and interest thereon for the payment of the corporate debts. Plaintiff proponent cites R.S. 14:8--10, N.J.S.A., in support of his claim of individual liability, which provides as follows:
Pursuant to this theory, he points out that the loans are undisputed, and therefore, because he is an unsatisfied judgment creditor of the corporation, he should be paid by, or have his judgment satisfied out of the assets of, the officers of the defendant corporation who made or assented to the making of loans to the other officers or stockholders.
Plaintiff also advances the theory that the corporate defendant, in repaying the loan of $4,200 to the defendant, James Matarese, preferred him as a creditor at a time when the corporation was insolvent; that such transaction constituted fraud on the other creditors of the corporation; and that such fraud is presumed by virtue of the circumstances.
This action is resisted strenuously by the individual defendants for many and various reasons, all of which I need not cover in this opinion.
The right to recover from the individual defendants has its authority in N.J.S. 2A:17--63, N.J.S.A., supra. This section must be interpreted carefully lest a garnishee would have property taken from him by other than due process of law. This is elemental. In fact, it is Sine qua non that before the court may direct the satisfaction of a debt out of the fund or assets of the garnishee, the garnishee must admit the debt.
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