On appeal from the Supreme Court, Essex Circuit.
For the appellants, Robert I. Morris.
For the respondents, Andrew Van Blarcom and Robert W. Brady.
The opinion of the court was delivered by
CAMPBELL, CHANCELLOR. This is an appeal from a judgment in favor of the defendants below.
The plaintiffs below being the owners of twenty (20) shares of the capital stock of the S. & S. Amusement Company, Incorporated, operating a moving picture theatre in Sussex, New Jersey, such shares being all of the issued and outstanding stock of the corporation, entered into an agreement to sell the same to the defendants, such agreement being in writing and dated August 4th, 1933. The total consideration was $3,000 of which $500 was paid upon the execution of the agreement and the balance of $2,500 was to be paid in monthly installments of $100 commencing October 1st, 1933. The contract contains no provision for acceleration because of non-payment of any installment.
It appears to be undisputed that at the time of this sale and agreement it was represented by the plaintiffs-sellers that the total debts of the corporation did not exceed $500, which debts, to that amount, the defendants-purchasers were to assume and pay as a further consideration in excess of the sum of $3,000.
Subsequently it developed that the indebtedness of the company exceeded the sum of $500 by some $168. This, by agreement of the parties, was paid by the defendants and deducted from the November and December payments under the contract of sale and the difference paid by the defendants to the plaintiffs. So far there appears to be no dispute and it is conceded that thereby the October, November and December, 1933, installment payments had been made and satisfied.
On January 4th, 1934, one Esther Alter, the assignee of Charles Reichman, the step-son-in-law of the plaintiff Benjamin Siegel, brought an action in the Supreme Court, Essex Circuit, against the S. & S. Amusement Company, Incorporated, seeking to recover an alleged claim against it of $1,014.69 for moneys said to have been loaned to it prior to the aforesaid sale of stock to the defendants.
As a result of this suit, the defendants did not pay the January 1st, 1934, installment nor any subsequent thereto. On February 26th, 1934, the plaintiffs brought suit to recover not only the installments of January and February, 1934, then due but for the entire balance of the consideration which they claimed amounted to $2,300. This was upon the theory that the contract of sale was entire and a default in the payment of one installment accelerated and made all remaining installments immediately due and payable.
The defendants answered by a general denial and that they were entitled to a credit of $300 and not $200, as alleged, and by two separate defenses:
1. That if the plaintiffs were entitled to recover anything they could not recover more than the two installments due and unpaid at the time of the commencement of the action, namely those ...