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United States Rubber Co. v. Champs Tires

Decided: April 2, 1962.

UNITED STATES RUBBER COMPANY, A NEW JERSEY CORPORATION, PLAINTIFF-RESPONDENT,
v.
CHAMPS TIRES, INCORPORATED, A NEW JERSEY CORPORATION, JOSEPH F. CUCCIA AND JOSHUA KATZ, DEFENDANTS, AND ALBINO NIGRO, DEFENDANT-APPELLANT



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

Goldmann

Plaintiff brought an action in the Law Division seeking recovery from defendant company, Champs Tires, Inc., for tires sold and delivered to it (counts 1 and 2), and judgment against the individual defendants Nigro, Katz and Cuccia, jointly and severally, on their guarantee of the company's account with plaintiff (count 4). The trial court directed judgment for $32,922.57 plus interest ($3,410.86) against the corporate defendant. It submitted the case to the jury on the guarantee count against the individual defendants, and judgment was entered in the total sum of $36,333.43 on the verdict in favor of plaintiff. The third count of the complaint against all defendants, sounding in conversion, was dismissed by the trial court on motion, and plaintiff does not appeal this dismissal.

Although Nigro appeals the whole of the final judgment, he was not a party to nor found liable under counts 1 and 2 of the complaint, nor does his brief deal with the corporate defendant's liability. This appeal is limited solely to Nigro's liability as adjudicated under the guarantee count.

Plaintiff deals in tires through its Gillette Division, and defendant Champs Tires, Inc., was a retail tire dealer. On August 1, 1958 they entered into a consignment contract.

Although Nigro contends that the contract expired December 31, 1958, we find that this is not so. By its very terms and by reason of the business transacted between the parties, the consignment contract was in effect during 1959, the year in which the debts in issue arose. In fact, the individual defendants admitted, in their answers to interrogatories, that the contract was in full force and effect during 1959. In addition to tires delivered to the corporate defendant under the consignment agreement, plaintiff during 1959 sold it tires on an outright or "straight sale" basis. By virtue of consignments and sales, the corporate defendant became indebted to plaintiff for $32,922.57, the amount of the debt for which judgment was directed against it.

On January 6, 1958, more than six months before the execution of the above consignment contract and several days before the execution of what appears to have been a predecessor consignment contract, defendants Nigro, Katz and Cuccia executed a guarantee in favor of plaintiff. Nigro was then president and a substantial stockholder of the corporate defendant. He and his individual codefendants admit the execution of the guarantee, which reads:

"In consideration of the credit which UNITED STATES RUBBER COMPANY (New York Branch), hereinafter called the Company, has extended and may extend to CHAMPS TIRES INCORPORATED, #10 Route 46, Lodi, N.J. hereinafter called the dealer, [ILLIGIBLE WORD] (we, jointly and severally) hereby guarantee to said Company the payment of any and all amounts which said Dealer may now be owing said Company, and any and all amounts said Dealer may hereinafter owe or become indebted to said Company, on account of the purchase price of any goods sold by said Company to the Dealer and/or on account of any obligations arising under the terms or operation of any consignment agreement between the Company and said dealer and/or by reason of any business transactions whatever between the Company and said Dealer , upon such prices, terms, conditions and credits as may be agreed upon between the Company and said Dealer from time to time without notice to the undersigned.

The liability of the undersigned under this guaranty shall not be released by any extension of credit or time of payment accorded by

the Company to the dealer or by the acceptance of notes therefore or by any composition or agreement as to the amount of terms of [or?] manner of indebtedness or otherwise.

(we) hereby waive notice of the acceptance of this guaranty, of shipment, of any goods or creation of any said indebtedness, of maturity of same, demand for payment and notice of extension of maturity or of any default, and it shall not be necessary for the Company to take proceedings against the Dealer before applying to (us) ...


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