McGann, J.c.c. (temporarily assigned).
This matter comes before the court on an order to show cause as a result of a levy made pursuant to N.J.S. 2 A:17-57 et seq.
The plaintiff seeks to obtain an order against Joseph F. Matarese, Frank R. Matarese and James Matarese, Jr. These men were defendants, along with the Bestby Products Corporation, in an action by the plaintiff wherein he recovered a judgment against the said corporation in the amount of $2,950, and the court dismissed the actions against the individual defendants Matarese.
The plaintiff contends that the individual defendants, who were officers of Bestby Products Corporation, during their tenure did loan corporate monies to two other officers, namely Scanlan and Greenberg, in the total amounts of $2,547.98.
The facts additionally indicate that James Matarese, the president of Bestby Products Corporation, had loaned the corporation $4,200 in 1954 and was repaid said amount in two installments: one in November 1954 in the amount of $1,500, and the balance of $2,700 in March 1955. The facts further show that in March 1955 the corporation did not have sufficient liquid assets to pay its just creditors and had been operating at a loss. The facts also indicate that the plaintiff had loaned the corporation the sum of $5,000 and was repaid in part, i.e. , the sum of $2,500.
As indicated above, this action is brought under authority of N.J.S. 2 A:17-57 et seq. N.J.S. 2 A:17-63 provides in part as follows:
"After a levy upon a debt due or accruing to the judgment debtor from a third person, herein called the garnishee, the court may upon notice to the garnishee and the judgment debtor, and if the garnishee admits the debt , direct the debt, to an amount not exceeding the sum sufficient to satisfy the execution, to be paid to the officer holding the execution or to the receiver * * *." (Italics supplied)
The proponent of the motion maintains that under the authority of the above cited section he has the right to collect the amount of his judgment from the various officers of the corporate debtor, Bestby Products Corporation, because they were responsible for making loans to stockholders or officers of the corporation or assenting to the making of such loans, and individually are jointly and severally liable to the extent of such loans and interest thereon for the payment of the corporate debts. Plaintiff proponent cites R.S. 14:8-10 in support of his claim of individual liability, which provides as follows:
"No corporation shall loan money to a stockholder or officer thereof. If any such loan be made the officers who make it, or
assent thereto, shall be jointly and severally liable, to the extent of such loan and interest, for all the debts of the corporation until the repayment of the sum so loaned."
Pursuant to this theory, he points out that the loans are undisputed, and therefore, because he is an unsatisfied judgment creditor of the corporation, he should be paid by, or have his judgment satisfied out of the assets of, the officers of the defendant corporation who made ...