On appeal from the Supreme Court.
For the plaintiffs-respondents, McKirgan & Gilson.
For the defendant-appellant, Lum, Tamblyn & Colyer.
The opinion of the court was delivered by
WELLS, J. This is an appeal from a judgment entered in the Supreme Court upon an order striking out the defendant's answer on the ground that it was sham in part and frivolous in part, and entering summary judgment thereon.
Suit was brought by the two plaintiff banks to recover from the defendant a balance of $8,000 and interest, which the defendant obligated himself to pay under the terms of a certain syndicate agreement, executed for the purpose of purchasing for the subscribers shares of stock of the George W. Durham Corporation, which agreement was assigned to the plaintiffs by the syndicate managers, as collateral security, for the payment of loans made by the two banks under the terms of the syndicate agreement to the syndicate managers.
The total amount of the subscriptions to the syndicate agreement was $350,000, of which the defendant subscribed $10,000 and paid $2,000 on account, leaving a balance of $8,000 due.
Under the terms of the syndicate agreement the subscribers thereto constituted and appointed the syndicate managers "their sole agents and attorneys to manage and conduct the affairs of the syndicate," and gave them "full power and authority to buy, sell and deal in and with or hypothecate and pledge any of the securities, bills and accounts, claims or demands belonging to the syndicate;" and
the syndicate managers were further authorized to borrow by means of a note or notes, such sums as may be necessary, but not exceeding the amount unpaid under the syndicate agreement and to pledge the agreement and the several payments to be made by the subscribers thereto as security for the loans.
The agreement was dated November 9th, 1925, and by the terms thereof, ten per cent. of the subscription was payable on the signing of the agreement, fifteen per cent. on or before December 1st, 1925, twenty-five per cent. on or before January 25th, 1926, twenty-five per cent. on or before February 25th, 1926, and the remaining twenty-five per cent. on or before March 5th, 1926.
Defendant paid $1,000 on signing the agreement and another $1,000 on December 29th, 1925.
On March 29th, 1926, the syndicate managers borrowed $100,000 from the plaintiff First Bank and Trust Company of Utica, and $50,000 from the plaintiff Utica Trust Deposit Company, and pledged ...