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Palumbo v. Collito

Decided: November 14, 1956.


Goldmann, Freund and Conford. The opinion of the court was delivered by Goldmann, S.j.a.d.


[42 NJSuper Page 440] After this action was tried in the Essex County Court, the pleadings were amended to designate the parties defendant as "Samuel Collito, Jr., Michael B. Collito, and Michael B. Collito, trustee for Anna Collito and Louis Collito, doing business as Victor Flush Valve Co., and Michael B. Collito, executor under the last will and testament of Thomas A. Collito, deceased." The County Court entered judgment in favor of plaintiff against Samuel Collito, Jr., Michael B. Collito, and Michael B. Collito, trustee for Anna Collito and Louis Collito, doing business as Victor Flush Valve Co.; and dismissed the second

count of the amended complaint against Michael B. Collito, executor of the estate of Thomas A. Collito, upon the ground that plaintiff had failed to file a claim with the executor. Defendants appeal from the judgment in plaintiff's favor and from the County Court order refusing to set aside the verdict and grant a new trial. Plaintiff cross-appeals from the dismissal of the second count.


Samuel B. Sbaraglio (erroneously denoted as Sbaraglia in the pleadings), plaintiff's decedent, was a building contractor. On December 15, 1952 he submitted to Thomas A. Collito two proposals for construction work in accordance with plans and specifications prepared by Joseph and James G. Centanni, architects. In the first he proposed to build for Victor Flush Valve Co. on its lands in Newark, N.J., a one-story factory building for $50,850; and in the second to build for Sylvester & Co. on its lands in South Orange, N.J., a residence for $46,500. Collito was then president of Sylvester & Co., a wholly-owned corporate subsidiary of the Victor partnership, but held no position in Victor. Sbaraglio's first proposal of $50,850 was increased to $66,900 in an estimate submitted on January 8, 1953, after the plans for the Victor building were amended to include a one-story shed. Simultaneously, he submitted to Sylvester an estimate for a completed basement at the South Orange premises for $10,750.

A day or so prior to January 14, 1953, Sbaraglio, Collito and James G. Centanni, the architect, conferred with Carl Abruzzese, Collito's attorney, at his law office to arrange terms for the construction of the factory and shed in accordance with the latest Sbaraglio proposal, and also to compile a schedule of payments. Centanni and Abruzzese made four pages of notes setting out the terms agreed upon. This was done in the presence of all the conferees. Centanni testified that Sbaraglio instructed him with reference to the preparation of the notes, and they incorporated everything he said. Abruzzese testified the memorandum was used by

all four conferees, and they agreed upon the total price and manner of payment set forth therein. Both Abruzzese and Centanni were permitted to testify to the details of the agreed schedule of payments, totalling $66,900, after refreshing their recollection from the notes. The court, however, refused to admit the memorandum in evidence.

On January 14, 1953 Sbaraglio and Thomas A. Collito entered into a contract for the construction of the factory and shed at a price of $77,650, $10,750 more than the previous figure. At the same time Sbaraglio handed Collito a formal proposal addressed to Sylvester & Co. to erect a complete basement for the South Orange residence, together with a temporary road, rough grading, 240-foot stone retaining wall, drain trench, and first floor beams and rough floor, for $10,750. At the foot of this proposal appears a receipt, "Paid for the above work," signed by Sbaraglio. Just when he signed this receipt is not shown.

The testimony was that immediately preceding the signing of the factory contract Sbaraglio and Collito had stepped out of the attorney's office and privately conferred in the corridor for about ten minutes. That contract, incidentally, followed the same schedule of payments as was testified to by Abruzzese and Centanni from their notes, except that $2,000 was added to each of the first five payments and $750 to the sixth and final payment.

Defendants claim that the factory price was inflated by $10,750, and that Sbaraglio's receipt shows this sum was to pay for the work he was to do at South Orange. They also assert that Sbaraglio never apprised them of all that had preceded the execution of the factory contract.

Sbaraglio began work on the factory building and South Orange basement. Up to June 12, 1953 Thomas A. Collito paid him $35,100 on account of the factory contract, representing slightly more than the first three payments under the schedule. However, nothing was paid Sbaraglio on account of the South Orange work. Collito died June 15, 1953 and his brother, defendant Dr. Michael B. Collito, was appointed his executor. Dr. Collito was and is a partner

in the Victor company, and he succeeded his brother as president of Sylvester & Co. When Thomas died construction on both jobs came to a standstill.

On September 9, 1953 Dr. Collito and Sbaraglio entered into a contract, prepared by Abruzzese, whereby Sbaraglio agreed to "erect and finish" the South Orange residence in accordance with the Centannis' revised drawings and specifications and under their direction, for $46,200. The schedule of payments provided that the builder was to get $7,000 "when foundation and basement walls are up and first floor beams in place and entire first floor beams have sub flooring, and when all exterior wood walls are sheathed and wood rafters are sheathed." The contract contained an allowance of $1,200 for the stone retaining wall if the owners decided not to have it erected. (It was, in fact, never erected.)

Work at the factory and South Orange residence was again resumed. During the ensuing year Sbaraglio received payments totalling $31,326.54 from Sylvester & Co. on account of the residence, and $34,949.36 from the Victor partnership for the factory in addition to the $35,100 previously paid by the decedent Collito. (It should here be noted that $9,990.70 in extras were added to the $77,650 contract, making a total of $87,640.70. Payments on account by decedent and Victor totalled $70,049.36, leaving a balance of $17,591.34.)

In June 1954 Sbaraglio left for a three-month vacation in Europe. Dr. Collito claims that while Sbaraglio was abroad he discovered an envelope containing the proposals and estimates of December 15, 1952 and January 8, 1953 in his deceased brother Thomas' clothes. He alleges that shortly thereafter he also discovered the receipted proposal of January 8, 1953 for a complete basement at the South Orange premises. Dr. Collito testified that he immediately got in touch with his accountant, Rothfeder, and arranged to confront Sbaraglio as soon as he came back from Europe. On September 30, 1954, the day after Sbaraglio's return, the parties met at the new factory building, with Sbaraglio, Dr. Collito, Samuel Collito, Rothfeder, Abruzzese and Centanni

present. The only information we have about what happened on that occasion comes from Rothfeder, who alleges that Dr. Collito and Sbaraglio conferred privately in an adjoining room; that he later joined the two and asked Sbaraglio what he was going to do about the receipt, and that Sbaraglio then said he was going to give Dr. Collito credit for it. Neither Centanni nor Abruzzese, both of whom testified during the trial, were examined by defendants' counsel with regard to this meeting. Dr. Collito said that a good deal of the talk was social, and Centanni, in the course of testifying with regard to certain extras performed, indicated that this subject came up at the September 30 conference when Sbaraglio was asked about a $5,000 extra charge "to fix these [South Orange] foundation walls," which Victor eventually agreed to pay. Sbaraglio died the day following the conference and plaintiff Palumbo, his son-in-law, was appointed executor of his estate.

It is evident from the record that the Collitos were closely bound in family ties and business affairs. When the Victor partnership found itself financially unable to undertake the erection of the new factory building, decedent Thomas A. Collito undertook to built it at no profit to himself. As noted, he made the first three payments under the contract. Although the Victor company in its answer denied that it assumed the factory contract, that defense had to be abandoned in the light of the testimony that it did assume and did make payments thereunder after Thomas died. It may also be mentioned here that it was Thomas who invested money in the Victor company for his sister, defendant Anna Collito, and his nephew and adopted son, defendant Louis Collito, by way of gift and declaration of trust whereunder he and his brother Dr. Collito were trustees for Anna and Louis.


It should be specially noted that at the pretrial conference the parties agreed that plaintiff would institute a separate action against Sylvester & Co. for the balance due

under the contract to construct the South Orange residence. Upon the institution of such suit, the counterclaim originally filed in the present action to recover certain sums allegedly owing by plaintiff's decedent was to be dismissed, reserving to defendants and Sylvester & Co. the right to plead the same in the action about to be instituted. Plaintiff thereafter instituted suit against Sylvester & Co. in the Law Division of the County Court. An order was then ...

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