On appeal from Superior Court, Chancery Division, Warren County.
Morton I. Greenberg and Furman. The opinion of the court was delivered by Furman, J.A.D.
The judgment on appeal before us is the third in a sequence of judgments against appellants Barry and Norma Gardner (Gardners) in favor of respondent First National State Bank of Northwest Jersey (First National). The final two judgments also run against appellant Damial Properties, Inc. (Damial), a corporation wholly owned by the Gardners. Neither the first nor second judgment was appealed.
The initial judgment was a default judgment in favor of First National on a promissory note in the amount of $74,142.45, against the Gardners, Fred Gardner, Barry's brother (Fred), and Irving Weber, Barry's then law partner, and his wife Barbara Weber (Webers), imposing joint and several liability. That judgment was entered on December 1, 1978.
On January 4, 1979, First National instituted a Chancery Division action to set aside a fraudulent conveyance by Fred and in aid of execution against Fred and the Gardners. Next day, First National accepted a 20-year note from the Webers for one-third of the judgment debt of $74,142.45, with interest.
Later, during the pendency of the Chancery Division action, by separate settlement Fred executed a 20-year note and second mortgage to First National, also for one-third of the judgment debt of $74,142.45 with interest. First National agreed orally to limit the liability of Fred and the Webers to one-third each of the judgment debt and not to attempt execution upon their property and assets for more than one-third each of the judgment debt if they maintained the schedule of monthly payments on their respective notes.
First National refused the Gardners a similar compromise arrangement. By judgment in the Chancery Division action, entered on July 11, 1979, the Gardners and Damial were ordered to execute an assignment in favor of First National of all their right, title and interest in certain real estate comprising about 92 acres in Independence Township, Warren County, in the full amount of the judgment debt of $74,142.45. The judgment further provided:
IT IS FURTHER ORDERED that in the event that defendants Barry Gardner and Norma Gardner, his wife and Damial Properties, Inc. do not execute the aforesaid assignment within three (3) days of the date of this Order, that this Order shall serve as the instrument of conveyance of the assignment, pursuant to N.J.S.A. 2A:16-7
The Gardners, who were tenants in common of the Independence Township property with plaintiffs in the present litigation, joined with plaintiffs in entering into a contract for its sale on or about October 1, 1980. A title search revealed First National's interest pursuant to the judgment of July 11, 1979. Plaintiffs instituted this action to compel the Gardners, Damial and First National as defendants to execute deeds and other necessary documents in order to comply with the contract of sale. The Webers and Fred are not parties to this action.
First National cross-claimed against the Gardners and Damial for judgment "in the full amount of the net proceeds received from the sale of the property." The Gardners cross-claimed against First National for a judgment directing that First National provide them a pro rata credit of two thirds of the
judgment debt of $74,142.45 because of First National's acceptance of notes from Fred and the Webers for one-third each of that debt. Plaintiffs reached settlements with all ...