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Reynolds Offset Co. v. Summer

Decided: June 5, 1961.

REYNOLDS OFFSET CO., INC., A CORPORATION OF NEW YORK AUTHORIZED TO DO BUSINESS IN NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
ALEXANDER SUMMER AND EDITH SUMMER, A PARTNERSHIP T/A ALEXANDER SUMMER CO., DEFENDANTS-APPELLANTS, AND JAMES E. HANSON AND ROBERT E. BLACKFORD, DEFENDANTS-RESPONDENTS



Goldmann, Foley and Collester. The opinion of the court was delivered by Collester, J.s.c. (temporarily assigned).

Collester

The defendants, Alexander Summer and Edith Summer, a partnership trading as Alexander Summer Co. (Summer Co.) appeal from a denial by the Law Division of their application to amend the pleadings and the pretrial order by adding as defenses to the action (1) the statute of frauds and (2) the right of the plaintiff, a New York corporation, to maintain the action. They likewise appeal the denial of their request to have additional discovery proceedings to support the last mentioned defense.

The plaintiff brought suit against Summer Co. upon an alleged breach of contract of a guarantee of subleasing and joined as defendants James E. Hanson and Robert E. Blackford, former employees of Summer Co. Summer Co. denied the authority of Blackford and Hanson to execute the instrument upon which suit was brought; crossclaimed for damages against them, and counterclaimed against the plaintiff for an alleged commission paid to plaintiff's president for the initial leasing of the premises.

At the trial a motion for involuntary dismissal was granted in favor of Summer Co.; the jury returned a verdict of $15,000 against each of the defendants, Hanson and Blackford; and Summer Co.'s counterclaim was dismissed. The trial court based its conclusion particularly on MacLeod v. Ajax Distributing Co. , 22 N.J. Super. 121 (App. Div. 1952), accepting Summer Co.'s contention that Hanson and Blackford had acted beyond the scope of their authority.

An appeal was taken to this court which reversed and remanded the case for a new trial on all issues except one not material here, Reynolds Offset Co., Inc. v. Summer , 58 N.J. Super. 542 (App. Div. 1959), certification denied 31 N.J. 554 (1960) holding that an issue of fact was presented "as to the existence of actual or apparent authority in Hanson and Blackford."

The pleadings and pretrial order did not assert as defenses the statute of frauds or the limitation of the right of plaintiff corporation to sue. Prior to argument of the appeal, Summer Co. moved for a dismissal of plaintiff's appeal and complaint upon the ground that plaintiff had no right to sue since it was a New York corporation not authorized to do business in New Jersey prior to the making of the alleged contract upon which plaintiff's cause of action was founded. While the issue was not raised at the trial below, this court held the motion for final argument of the appeal and then considered it as a matter of public interest. Reynolds Offset Co., Inc. v. Summer, supra , 58 N.J. Super. , at p. 548. In its decision this court stated at page 550 of 58 N.J. Super.:

"As far as the proofs disclose, the lease and guarantee were the first piece of business transacted by plaintiff in this state. It was an isolated transaction. No business had been done in New Jersey prior thereto. * * * plaintiff is not barred from maintaining the action sub judice."

Following the reversal and remand this case again came before the trial court for a new pretrial conference pursuant to the requirements of R.R. 4:29-7:

"A pretrial conference shall be scheduled for every case in which a new trial is directed by the trial court or by mandate of an appellate court."

At said pretrial conference, Summer Co. unsuccessfully sought to include in the pretrial order the additional defense of the statute of frauds and the defense that plaintiff could not maintain its action since it was not authorized to do business in New Jersey prior to the giving of the alleged guarantee sued upon and, in any event, it had conducted prior business in this State. The trial court also denied Summer Co. an extension of time to have additional discovery solely on the question of whether the plaintiff had done business in New Jersey prior to the making of the alleged guarantee agreement. This court granted leave to appeal from a denial of such applications.

The defendant contends that the trial court abused its discretion in refusing to include the two additional defenses in the pretrial order and by ...


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