This is a proceeding to determine certain rights and liabilities for the receiver of an insolvent corporation.
Plaintiff, as a creditor of Fiberonics Industries, Inc., originally brought this action seeking the appointment of a receiver pursuant to N.J.S.A. 14A:14-2. The complaint was filed in this court on October 14, 1969 and a statutory receiver was appointed after a determination that Fiberonics was insolvent.
On December 17, 1969 the attorney for the receiver obtained an order to show cause why John Carpenter and Steven Skorupan, doing business as C & S Machinery Company, Inc., hereafter (C & S), and Floyd A. New and E. W. Thompson, doing business as Greensboro Wood Products Company, Inc., (hereafter Greensboro), should not have to account for certain assets that belong to the receivership.
Both C & S and Greensboro contested the order to show cause and the matter was tried in a plenary hearing.
At the hearing the following uncontroverted facts were established. On January 16, 1969 C & S, through its officers Carpenter and Skorupan, signed a contract with Fiberonics Industries, Inc. agreeing to sell certain enumerated machines and parts for $78,930. The terms of payment were that 20%, or $15,786, was payable at the signing of the contract and the balance 30 days after delivery of the completed order. Paragraph 5 of the agreement provides:
RETENTION OF TITLE. Title to above goods to remain in Seller until purchase price has been fully paid in cash. Buyer to sign notes, not in payment, but as evidence of obligation and all other papers necessary to place this contract on record, furnish such waivers, papers and security as requested, keep property fully insured; policies payable as interests appear and pay all taxes. It is expressly agreed said property shall in no event become a fixture or part of realty. If Buyer should default in any payment, attempt to sell, mortgage or remove property without Seller's written consent, or become insolvent or in any manner jeopardize Seller's interest
in property, then all payments become immediately due and payable and Seller or his agent without notice or process of law, may enter our premises, make any necessary openings in building and remove property, Buyer to pay all expenses necessary, by default, in which case Seller has the option to consider all payments made as rental or liquidated damages.
C & S completed 99% of its deliveries by May 31, 1969. Except for the $15,786 paid in January, no payments have been made to this date of the amount due under the contract.
On August 1, 1969 C & S filed a financing statement with the Secretary of State's office and the Monmouth County Clerk's office covering the machinery delivered under the contract.
On October 13, 1969 C & S repossessed all the machinery by paying the landlord $3600 of the rent due him and transporting them back to its Tennessee plant.
In February 1969, Greensboro, acting through Floyd A. New and E. W. Thompson, signed a contract with Fiberonics agreeing to sell one Rouse shaping lathe for $6,500, payable $1,300 at signing and the balance within 45 days after the delivery of the machine. A notation on the agreement indicates that the machine was delivered on March 13, 1969. Paragraph 5 of the agreement provides:
The Seller and Buyer agree that title to the machine in question is to remain with Seller until payment in full of the purchase price. In furtherance of this matter the parties agree to execute a UCC Financing Statement to be filed with the Secretary of State of New Jersey. Payment of preparation and filing of said financing statement is to be borne by Seller. Immediately upon payment in full Seller agrees to execute and deliver to Buyer the proper authority to cancel said financing statement.
On May 22, 1969 a financing statement was filed with the appropriate offices in this State. A total of $2,050 was paid on the machine. On October 13, 1969 Greensboro, in conjunction with C & S, paid the landlord $400 and ...