W. W. Snyder & Co. v. Marshall ( 1931 )

Memorandum.

The plaintiff corporation, whose business, or at least a part thereof, appears to be stock speculation, sues to recover a balance of margins deposited with defendants, who acted as plaintiff’s brokers. The defense set up on the motion, and (appearing in the pleadings) is that the corporation plaintiff guaranteed the individual account of Snyder, its president, and Jackson, then its secretary, and that losses on those accounts amount to more than the balance claimed by plaintiff. A further defense rests on a similar guarantee of “Ardsley Syndicate,” with which plaintiff or its officers, or both, appear to be connected in some way.

At the argument counsel were advised that the question of prima facie authority to the president and secretary to execute the written guarantees would be regarded as settled for the purposes of this motion, leaving the ultimate disposition of it to a trial. The question reserved was whether for the plaintiff a case of ultra vires was made out, so that the guarantees should be disregarded as without legal validity. On reflection, and after reading the briefs with which counsel have favored me, I do not think that such a case has been made out so clearly as to call for a summary judgment. The powers stated in the plaintiff’s certificate of incorporation are very broad indeed; the good faith of defendants in relying on the guarantee is not impugned. It is said that on their face they should have been rejected by defendants. But this is not at all clear. The result must be a denial of the motion to strike out the answer, and a relegation of the parties to a trial in ordinary course.