Piechowski v. Matarese
| Decision Date | 02 March 1959 |
| Docket Number | No. A--18,A--18 |
| Citation | 54 N.J.Super. 333,148 A.2d 872 |
| Parties | William J. PIECHOWSKI, Plaintiff-Appellant, v. Frank R. MATARESE et al., Defendants-Respondents. |
| Court | New Jersey Superior Court — Appellate Division |
Martin L. Haines, Mount Holly, for appellant (Dimon, Haines & Bunting, Mount Holly, attorneys).
Burton Peskin, Trenton, for respondents (Alexander Denbo, Burlington, attorney).
Before Judges GOLDMANN, FREUND and HANEMAN.
The opinion of the court was delivered by
HANEMAN, J.A.D.
Plaintiff appeals from a final judgment of dismissal entered by the trial court on defendants' motion at the close of plaintiff's case. He urges the following grounds entitling him to a new trial: (1) the evidence established a Prima facie case entitling him to have the matter passed upon by the jury; (2) error in the exclusion of evidence concerning his personal habits and background; (3) error in denying his motion for a new trial.
On June 24, 1957 plaintiff commenced the instant action against Frank R. Matarese, Joseph F. Matarese, James Matarese, Jr., John Scanlon, and Bestby Products Corporation (Bestby), jointly, severally and in the alternative. The complaint was in five counts. In counts four and five plaintiff sought a judgment in the sum of $2,500 against Bestby alone on alternative counts for a money loan. It was stipulated that he should have judgment on those counts.
The matter was tried upon the first three counts. The theory and allegations of each may be synopsized as follows: (1) breach of contract arising from defendants' failure to deliver 40% Of the common stock and 50% Of the voting rights of Bestby and their refusal to pay him $325 per week subsequent to July 10, 1955; (2) fraud in that defendants knowingly misrepresented the financial condition of Bestby during the negotiations which culminated in an agreement dated February 5, 1955, and represented that plaintiff would be paid $325 per week for an indefinite time, when in fact they had no intention to pay him such a sum for an indefinite period; (3) breach of trust arising from the manner in which defendants, as officers and directors of Bestby, conducted the corporate business. Plaintiff sought a money judgment in the sum of $100,000, an accounting, and costs of suit.
The certificate of incorporation of Bestby Products Corporation (Bestby) was filed in the office of the Secretary of State of New Jersey on March 30, 1954 and was recorded in the office of the Clerk of Burlington County on March 31, 1954. Bestby was thereby authorized to issue 100 shares of no-par common stock. The shares authorized to be issued were to be divided into three classes, the number of shares to be apportioned among the classes as follows: Class A--54 shares; Class B--34 shares; Class C--12 shares. The stock of classes A and B was denominated the voting stock. The subscribers to Bestby stock, the classes of stock subscribed and the number of shares subscribed by each are found from the certificate of incorporation to be the following:
James Matarese, Sr. 9 shares Class A stock
Abrogio Matarese 18 shares Class A stock
Joseph F. Matarese 9 shares Class A stock
Isadore Matarese 9 shares Class A stock
James Matarese, Jr. 9 shares Class A stock
Bestby was incorporated for the purpose of acquiring the assets of a New York corporation, MBP, then engaged in the business of manufacturing children's furniture. Bestby accomplished this purpose and thereafter set up and operated a manufacturing plant in Burlington County, at which it conducted the business of manufacturing and selling children's furniture under the direction of the individual defendants.
After about one year's operation, Bestby was in need of additional working capital. Frank Matarese, treasurer of Bestby, approached plaintiff, seeking to sell him an interest in Bestby. During subsequent negotiations between plaintiff and the Matareses, plaintiff was counselled by both his lawyer and his accountant. The Matareses furnished plaintiff with balance sheets of Bestby. There is no proof that the balance sheets were false or that the financial condition of Bestby was misrepresented. Plaintiff submitted that data to both his lawyer and his accountant and relied upon their advice in concluding that he would accept the offer which the Matareses had made to him. As a result, the parties entered into the following agreement:
'State of New Jersey
County of Burlington ss.
'This Agreement drawn this 5th day of February, 1955, by and between the principle stockholders and officers of the Bestby Products Corporation, a corporation organized under the laws of the State of New Jersey, and engaged in the manufacture and sale of juvenile furniture and Mr. William J. Piechowski of 310 Elm Avenue, Burlington, New Jersey, for the purpose of selling to Mr. William J. Piechowski an interest of 40 percent in the aforementioned corporation for the sum of $40,000.00 (Forty Thousand dollars), do hereby agree to the following:
'It is further understood and agreed that the present duties of the undersigned officers and stockholders of the Bestby Products Corporation shall remain in the same.
'Agreed and signed to this 5th day of February, 1955.
'For Bestby Products Corp.:
'Isadore Matarese /s/
'Stockholder
'For interested party:
'Mr. J. Piechowski /s/
'Witnesses: (Illegible)
'Jack Lawrence /s/'
James Matarese, Sr. was not named a party defendant. John Scanlon was not served.
Plaintiff paid $40,000 in installments, as follows:
February 8, 1955 $20,000
February 17, 1955 10,000
March 2, 1955 8,000
March 14, 1955 2,000
The $40,000 was deposited to the account of Bestby and used for its purposes. Plaintiff was appointed a vice-president of Bestby. He received a salary from Bestby of $325 per week from February 5, 1955 to July 14, 1955, although the nature and duties of his employment were tenuous and indefinite. Thereafter he requested regular employment and through Frank Matarese was hired by Bestby to work in the plant at a salary of $48 or $50 per week. The defendants Matarese devoted full time to business but received no salary.
The minutes of Bestby were kept most informally. No stock was ever issued to plaintiff, defendants, or to any other person. . However, plaintiff was given notice of all corporate meetings, attended a number, and Bestby functioned as a corporate entity, in the business of manufacturing children's furniture. No dividends were declared by Bestby.
The business venture did not realize the optomistic hopes of the parties but, to the contrary, sustained a steady and increasing loss.
It is axiomatic that a motion for judgment at the end of plaintiff's case admits the truth of plaintiff's evidence and every inference of fact which can be legitimately drawn therefrom which is favorable to plaintiff, and denies only its sufficiency in law. On such a motion the trial court cannot weigh the evidence. Melone v. Jersey Central Power & Light Co., 18 N.J. 163, 170, 113 A.2d 13 (1955).
It should be noted that plaintiff's demand for judgment was for damages, an accounting and costs. He did not seek equitable rescission.
The agreement upon which suit is here brought is ineptly and inartistically worded. Paragraphs numbered 1 and 2 are susceptible to a number of constructions. It could be concluded from these paragraphs and from the manner in which the agreement was signed that it was intended that the agreement should be binding upon (1) the individual signatories; (2) the corporate entity, or (3) both such individuals and the corporate entity. It could as well be concluded that plaintiff was to receive (1) 40% Of the stock issued and outstanding and a 50% Voting right; (2) 40% Of each class of authorized capital stock and a 50% Voting right, or (3) 40% Of the voting stock then issued and outstanding, or 40% Of the authorized voting stock, or a combination of both, which would result in vesting him with 50% Of the voting stock of the corporate entity. It is not necessary for the purpose of this opinion to construe the agreement in order to ascertain what the true intent of the parties was, since under any construction plaintiff has no ground for recovery.
Were the provision for the vesting of a voting interest in plaintiff construed to be in excess of his proportionate stockholding such a provision would be in violation of the statutes of this State and hence void. In Nickolopoulos v. Sarantis, 102 N.J.Eq. 585, 587, 141 A. 792, 793 (E. & A. 1928), the court said:
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