The opinion of the court was delivered by: NEAHER
Plaintiff has moved for summary judgment in these related diversity actions to recover the principal and interest due on non-negotiable promissory notes made by defendants. The facts of the two cases are virtually identical.
Plaintiff Globe Security Systems, Inc. ("Globe") is a Pennsylvania corporation with its principal place of business in Philadelphia, Pennsylvania. Defendant married couples are New York citizens and the two husbands are private investigators specializing in investigating and adjusting insurance claims.
Defendants Percudani and Bluestein have been associated as private investigators for nearly 25 years. In 1969 they were joined in business by a third individual, Nathan Horowitz, and the three established a new corporate entity, in which they shared equally, called Consulta-Search Corp. ("Consulta-Search").
In 1970, by a registered public offering of common stock, Consulta-Search became a publicly-held corporation with the three principals retaining approximately 86% of the outstanding stock.
In March 1972, following extensive negotiations, plaintiff acquired this 86% stock interest from the three individuals, and ultimately Consulta-Search became a wholly-owned subsidiary of Globe. The stock purchase agreement provided in essential part that each of the three principals would receive an initial cash consideration of approximately $300,000 and a right to share in "additional consideration" which would be contingent upon future earnings.
As part of this transaction, the Percudanis and the Bluesteins, in return for loans, executed promissory notes payable to Globe (the "1972 notes").
The note executed by the Percudanis was in the amount of $96,000, while the Bluesteins' note was in the amount of $97,000.
In addition, each of the three principals of Consulta-Search were given new employment agreements for terms of approximately 3-1/2 years, with the salary under each agreement fixed at $42,760 per annum. All three employment agreements contained identical language insuring that the three individuals would each have authority to "exercise general direction and control over the operations of the business."
Soon thereafter friction developed between Globe and Horowitz on the one side and Percudani and Bluestein on the other. The dispute was resolved on January 1, 1973 in a memorandum of agreement by which:
(a) The employment agreements of Percudani and Bluestein were terminated as of December 31, 1972, without any compensation therefor.
(b) Percudani and Bluestein each received $42,760 (i.e., an amount equal to one year's salary) in settlement of their rights to the "additional ...