Bischoff, Michels and E. Gaulkin. The opinion of the court was delivered by Bischoff, J.A.D.
Defendant First State Bank of Hudson County and intervenor Federal Deposit Insurance Corporation, as liquidator of First State Bank of Hudson County, appeal from a judgment entered in favor of plaintiff New Jersey Bank and against the defendants in the sum of $65,595.60.
The basic facts giving rise to this lawsuit are undisputed.
In July 1972 defendant Joseph P. Palladino sought a 90-day loan of $100,000 from plaintiff. Everett Muh, an officer in plaintiff bank, asked for a financial statement and requested "some sort of collateral or support" for the loan. In compliance with this request plaintiff received a letter dated July 5, 1972 from Edward B. Dooley, president of defendant bank, reading:
This letter will serve as a commitment to you that the First State Bank of Hudson County will assume the obligation arising from a note signed by Mr. Joseph P. Palladino on July 16, 1972, in the amount of $100,000.00.
We will honor this commitment, ninety (90) days after the date of the note, upon notice to us that the loan has not been paid by Mr. Joseph P. Palladino.
That same day, July 5, Palladino executed a note for $100,000, received a check in that amount from plaintiff and deposited it to his account in defendant bank as part of a deposit of $125,000.
Records of defendant bank indicate that as of June 5, 1972 Palladino owed defendant bank $60,000 and that on July 12 this amount was reduced to $28,000, a reduction of $32,000.
The $100,000 note came due on October 3 and plaintiff demanded payment. Dooley called Muh of plaintiff bank and requested that plaintiff accept a $50,000 reduction from Palladino and accept a new note in the amount of $50,000 for six months, upon the understanding that a new letter would be forwarded from defendant-bank to plaintiff. Muh agreed.
Plaintiff received the $50,000 in reduction of the loan. Palladino executed a new note for $50,000 dated October 12, 1972, and Dooley, as president of the First State Bank of Hudson County, sent the following letter to plaintiff, dated October 11, 1972:
This letter will serve as a commitment to you that the First State Bank of Hudson County will assume the obligation arising from a note signed by Mr. Joseph P. Palladino on October 12, 1972 in the amount of $50,000.00.
We will honor this commitment six (6) months after the date of the note upon notice to us that the loan has not been ...