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:
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:
1. William J. Piechowski shall own 40 percent of the stock of the Bestby Products Corporation.
2. William J. Piechowski shall have 50 percent voting rights.
3. William J. Piechowski shall receive a salary of $325.00 per week.
4. In the event of the demise of Mr. Piechowski, his rights and shares in the Bestby Products Corporation shall be passed on in full to his wife. In the further event of the demise of Mrs. Piechowski, wife of Mr. William J. Piechowski, either at a later date, or simultaneously with the demise of Mr. Piechowski, the stock shall revert back in full to the Bestby Products Corporation after the said Corporation has paid in full the book value of the stock at such time to the Piechowski estate.
5. This stock as held by Mr. and Mrs. Piechowski shall not be sold, assigned, or transferred without first offering the said stock to the principles of the Bestby Products Corporation hereinunder signing this agreement, first.
It is further understood and agreed that the present duties of the undersigned officers and stockholders of the Bestby Products ...