The issues presented to the Court come before it on motion for summary judgment, R.R. 4:58 et seq. The motion is supported by the pleadings, affidavits, depositions, admissions, answers to interrogatories and certain agreements, the contents of all of which shall be adverted to in the course of this opinion.
Plaintiff, George J. Jackson was an employee of Phillips Specials (Phillips), a New Jersey corporation, wholly owned, however, by a Missouri corporation, Ujay, Inc. (Ujay) which was licensed to do business in this State. Plaintiff sustained a compensable work-related injury for which he received a workmen's compensation award against Phillips for $7,254.21. This award was docketed in the Hudson County Clerk's office on November 9, 1966, pursuant to R.S. 34:15-58, and later docketed in the Superior Court on November 23, 1966. The award has not been appealed, nor has it been paid.
Phillips was a trucking company whose principal place of business was on Fisk Street, Jersey City, where its terminal facilities were located. It had as its principal asset an interstate trucking franchise issued by the Interstate Commerce Commission (I.C.C.).
One Wallace T. Taylor desired to acquire the franchise for Diamond T. Trucking (Diamond T), the defendant herein, a Delaware corporation, then with principal place
of business in Philadelphia, Pa. Taylor was president, director and principal stockholder of Diamond T.
To effect his purpose Taylor entered into a contract with Ujay to purchase all the capital stock and assets of Phillips. Ujay was owned and controlled by two principal stockholders, William B. Cox and David H. Schleuter, the former acting as secretary-treasurer, the latter as president-vice president of Ujay. Cox and Schleuter were also officers and directors of Phillips.
The contract of sale and its supplementary agreement were executed in St. Louis on March 31, 1966. In the contract Taylor was named as the buyer, although provision was made for the assignment and transfer of the rights and assets covered by the contract to Taylor's corporate nominee, Diamond T. The contract contained the following highlights: $100,000 consideration for the Phillips stock; $12,436 in consideration for its assets; an $80,000 promissory note executed or to be executed by Diamond T and guaranteed by Taylor individually; the creation of a seller's security interest in the I.C.C. operating authority; seller's permission to liquidate, merge or consolidate Phillips; resignations by Phillips' old officers and directors, and releases by them of any claims they might have against the corporation. Ujay further agreed to pay all debts and liabilities of Phillips of any kind, absolute or contingent, existing on the date of closing, March 31, 1966. Furthermore, Ujay agreed to indemnify and save Taylor harmless from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses incident to any failure of Ujay in fulfilling any terms of the sale contract. Attached to the contract and made a part thereof was "Exhibit D" which listed certain outstanding obligations of Phillips. Included on Exhibit D was plaintiff's compensation claim beneath which Ujay declared its obligation to accept all liability with regard thereto. Finally, the contract was to be governed by the law of Missouri.
Taylor's deposition shows that he operated Phillips until March 7, 1967 when the I.C.C. approved the transfer of the
interstate franchise to Diamond T. (Apparently, the I.C.C. originally approved the transfer before the compensation award was rendered as appears from a copy of an I.C.C. order dated September 12, 1966 attached to the moving papers. Plaintiff intervened in these proceedings which probably accounts for the delay in obtaining final approval.)
Taylor's deposition also reveals that he had actual knowledge of plaintiff's claim at the time he purchased the Phillips stock. After the franchise was transferred, all the trucks and other operating equipment were registered in Diamond T's name in Pennsylvania. All operations hitherto performed by Phillips were then and are now performed by and under the name of Diamond T. Phillips has no assets in New Jersey and no longer conducts any activities although it has not been statutorially dissolved because, as Taylor says, "I was kind of worried about putting it to sleep until everything was squared away." Although Diamond T now has title to all Phillips' assets and is now operating from the Jersey City terminal facilities, no consideration was paid by Diamond T to Phillips, as is revealed by Taylor's statement that he simply let Phillips' checking account deplete itself after he transferred all the assets.
Before discussing the applicable law, it should be noted that this action has been commenced in the Law Division of the Superior Court against Diamond T. Taylor, Phillips and Ujay are not named in this action and, therefore, nothing in ...