On appeal from the Passaic County Circuit Court.
For the plaintiff-appellant, Edward T. Moore.
For the defendants-respondents, Aaron Heller.
Before Case, Chief Justice, and Justice Burling.
The opinion of the court was delivered by
BURLING, J. This is an action at law whereby the plaintiff demands possession of thirty-eight shares of stock of the United Bedding Manufacturing Co., a New Jersey corporation, together with other papers named as release, assignments, books, papers and documents.
The sole issue is whether the appellant had the right to rescind a sale of thirty-eight shares of stock of the corporation to the defendant Morris Braverman. The gravamen is grounded upon the terms of a written contract dated November 3d, 1941, between the plaintiff, Harry Braverman, and the defendant Morris Braverman. The remaining defendants, Sol Eigen and H. Dick Cohen, were made such because of the escrow provisions in the contract, one being the attorney for the plaintiff and the other attorney for the defendant. The case was tried before the court and without a jury.
From the stipulated facts and evidence, it appears that the plaintiff and defendant Morris Braverman are brothers. They were the sole owners of all the stock of the aforesaid corporation. On November 3d, 1941, they entered into a written agreement, under the terms of which the defendant Morris
Braverman purchased from the plaintiff all the stock owned by him in the corporation for an agreed price of $3,500, payable in installments. During the period of payment of the sales price, the plaintiff's stock in the corporation as well as certain books and papers as well as a general release from the plaintiff to the said defendant were placed in escrow jointly with the defendants Sol Eigen and H. Dick Cohen who were respective counsel for the plaintiff and the defendant. The contract provided for two payments of $600 each, one on the execution of the agreement and the second by a note payable thirty days from the date of the execution of the agreement. These payments both were made. It further provided for a schedule of installment payments commencing December 10th, 1941, at the rate of $25 each week consecutively until the remaining consideration had been paid. Payments aggregating $1,000 were paid purportedly under this schedule. The agreement contained an acceleration clause as follows:
"3. It is further understood and agreed between the parties hereto that in the event of default of any one of the aforesaid payments and such default exists for a period of two weeks of the date the same becomes due, then in that event the said party of the first part reserves the right to demand the entire unpaid balance then due."
The last payment was made under date of September 20th, 1942. Two further payments were made by the defendant by check, one on October 15th, 1942, in the sum of $100 and the other on November 13th, 1942, in the sum of $100. Acceptance of these two payments was refused by the plaintiff and demand was made for payment of the entire balance, upon the ground that the failure to pay in accordance with the contract invoked the acceleration clause. On October 24th, 1942, the plaintiff notified the defendant in writing that he elected to rescind the contract and demanded the return of the certificate and other papers which had been deposited in escrow. At that time the defendant had paid and there ...