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Roselle v. La Fera Contracting Co.

Decided: January 15, 1952.


Stein, J.s.c.


[18 NJSuper Page 21] Plaintiffs, Arthur Roselle, Louis P. Roselle, Crescent Roselle and Pietro Roselle, trading as Pietro Roselle & Sons, in the first count of the complaint pray for an accounting against the defendants because of a joint venture agreement made between them and the defendants. As to this count the defendants answering seek rescission of the joint venture agreement and allege fraud and misrepresentation at the time of the making of said joint

venture agreement, and that the work allotted to the defendants was grossly disproportionate to that allotted to the plaintiffs and resulted in hardship in that it imposed a burden not intended by the parties, and counterclaim in which they seek accounting against the plaintiffs.

In the second count of the complaint, Pietro Roselle, individually, seeks a judgment under an agreement in writing made by all of the joint venturers with him in which agreement he was retained as superintendent of the joint venture at $50 per week. To this count the defendants answer admitting the agreement, but say that the plaintiff failed to perform his duties as supervisor and pray rescission of the agreement.

On June 19, 1950, plaintiff and defendants executed a written contract under which they agreed to make a joint bid for the garbage collection contract in the City of East Orange. It was provided in the agreement that if their bid was successful and the contract awarded to them, performance under the contract would be engaged in by them jointly in the name of Roselle, La Fera, Petrozello Co. The joint venture was to commence on August 1, 1950, and was to continue for the life of the garbage collection contract and any renewals thereof in the same names. The parties to the joint venture were to make equal contribution by way of capital necessary for the conduct of the joint venture. The net profits, or net losses, after deducting all expenses attending the conduct of the business was to be divided equally between them.

The testimony adduced on the hearing reveals that the joint venturers had all heretofore been engaged in the collection of garbage and had made bids in various municipalities. Each was equipped with items used in the conduct of such business. The agreement provided that the equipment which each had was to be maintained and kept in repair out of the funds of the respective parties and the equipment was to revert to the respective owners after the termination of the joint venture.

On July 31, 1950, a supplemental contract was made in which was recited that whereas the parties to the joint venture had been awarded the contract for the collection of garbage by the City of East Orange beginning the first day of August, 1950, for a period of five years, the joint venturers agreed to divide the city into three equal parts for the collection of such garbage during the entire term of the contract. It is not in dispute that for some time prior to the awarding of the contract the parties, all of whom were well acquainted with the area in which the garbage was to be collected, held many conferences and drew a number of maps in which they endeavored to determine the area to be served by the respective parties in the carrying out of the joint venture, and that they finally drew a map dividing the municipality into three equal parts. They next took up the question as to what area each of the joint venturers should serve in collecting garbage. A map as finally agreed upon shows the sections to be covered by the respective joint venturers "A" "B" and "C." The "A" section on the map is colored in blue, the "B" in red and the "C" in yellow. Before the supplemental agreement of July 31, 1950, was actually executed, but after the sections had been laid out on the map as "A" "B" and "C," the joint venturers discussed the question of whether the section so marked on the map should be assigned to each by drawing lots, but that was abandoned and the parties then executed the agreement in which section "A" colored in blue was allotted to Pietro Roselle & Sons, section "B" colored in red was allotted to James Petrozello Company, Inc., and section "C" colored in yellow was allotted to La Fera Contracting Co. The supplemental agreement recites, the reason why the division was made into three equal parts was to avoid difficulties which might arise in the future as a result of such division or allotment, and goes on to say that

"it is hereby agreed and understood that irrespective of which party performs more labor, work, and service than the other the acceptance of the labor, work, and service now established in accordance

with the map hereto annexed shall be the duty and assignment of each individual Party for the entire term of the existence of this contract; and, * * * it is further understood and agreed that any increase in the collection of garbage, ashes and refuse or the erection of buildings in any of the respective areas in the map hereto annexed has no bearing whatsoever for a demand in a change of the areas by any of the respective Parties."

The parties thereafter executed the contract with the city under their bid and received payments from time to time from the municipality which money was deposited in the bank account of the joint venture. After deducting certain administration expenses, the balance remaining was distributed in equal parts to each of the joint venturers. This practice continued monthly from the inception of the contract until some time in January, 1951, up to which time the books and records of the joint venture were maintained at the home of Pietro Roselle. Out of monies collected and deposited in the joint account regular distribution was made to the respective joint venturers in equal parts, leaving some reserve for operation and payment of supervision of the business.

Some time in January, 1951, payment to Roselle, notwithstanding he was caring for the garbage of the city in the portion thereof assigned to him, was not made to him but his one-third share in the account was retained and payment was refused to him upon the contention that the work allotted to him in his one-third portion of the ...

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