This is an action for deficiency on a promissory note, executed by Carriage Barn, Inc., in favor of National Community Bank of Rutherford, New Jersey.
In 1965 William H. Nuckel and Calvin F. Sergent, individual defendants in this case, were the principals of a corporation known as Hinchman Hills Corp. which was the owner of a tract of land on Route 202 in Oakland, New Jersey. In May 1965 Nuckel and Sergent joined with third-party defendants John H. Terwilleger and John L. Wershing, Jr., both of whom were also stockholders and officers in the plaintiff T & W Ice Cream, Inc., to form a new corporation called Carriage Barn, Inc.
Carriage Barn, Inc. was formed for the purpose of carrying on an ice cream parlor business. Hinchman Hills Corp. contributed the use of the land on Route 202 in Oakland and T & W Ice Cream, Inc. invested $50,000 on improvements and equipment. The officers of Carriage Barn were Terwilleger, president; Sergent, vice president; Nuckel, treasurer and Wershing, secretary. Registered agent of the new corporation was Sidney V. Stoldt, Jr., and his office at 215 Main Street, Ridgefield Park, New Jersey was designated as the principal office of the corporation.
On May 22, 1967 Carriage Barn executed a promissory note in the amount of $8,983.41 in favor of National Community Bank of Rutherford, New Jersey, and as collateral simultaneously executed a security agreement in favor of the bank covering certain furniture and equipment used in the business. Payment of the obligation was personally guaranteed by all four of the officers of Carriage Barn, Inc.
Sometime after execution of the promissory note to the National Community Bank, the ice cream business carried on by Carriage Barn failed and the corporation became defunct. On November 20, 1967 plaintiff T & W Ice Cream paid off
the promissory note for $6,908.36, the amount then due, and at the same time received an assignment from the National Community Bank of all its right, title and interest in the security agreement which had accompanied the note.
Subsequently Terwilleger, acting on behalf of T & W Ice Cream, went to the Carriage Barn premises in Oakland and in the presence of defendant Nuckel repossessed the furniture and equipment which had been pledged as collateral under the security agreement on May 22, 1967.
On April 10, 1968 plaintiff T & W Ice Cream, by its president, E. F. Wakefield, addressed a letter to Carriage Barn, Route 202, Oakland, New Jersey. This letter purported to give notice to Carriage Barn that plaintiff intended to sell at private sale the collateral which had been previously repossessed and to apply the proceeds against the unpaid balance on the promissory note. Though the letter was addressed to Carriage Barn, at Route 202, Oakland, New Jersey, it was actually delivered by Wakefield, president of T & W Ice Cream, to Terwilleger, president of Carriage Barn, at Terwilleger's office, 1184 Ridgewood Avenue, Ridgewood, New Jersey, which is the office of T & W Ice Cream.
No notice of the scheduled private sales was given to Carriage Barn at its principal office, nor was any notice given to either of defendants Nuckel or Sergent, although Terwilleger attempted to phone Nuckel twice and Sergent once, but none of these calls was completed. Then, on April 24, May 14 and June 24, 1968, the collateral was sold to various purchasers (with whom T & W Ice Cream had been doing business) for a total price of $2150.
Following the private sales, plaintiff T & W Ice Cream instituted this suit against Carriage Barn, Nuckel and Sergent to recover the deficiency. Action against Nuckel and Sergent is based on their personal guarantee of the promissory note which had been executed by Carriage Barn on May 22, 1967.
Thereafter, defendants Nuckel and Sergent filed a third-party complaint against Terwilleger and Wershing as coguarantors of the note, demanding contribution on any judgment which may be entered against them on the complaint of T & W Ice Cream. Both Terwilleger and Wershing admit the ...