
    Theodore Randolph, Plaintiff, v. George Jacobs et al., Defendants.
    Supreme Court, Special Term, Nassau County,
    November 2, 1959.
    
      
      Gerard I. Nierenberg for plaintiff.
    
      Williams & Geiger for Sam Merhige, defendant.
    
      Goodstein & Moed for Marta Cooperative, Inc., defendant.
   Mario Pittoni, J.

The plaintiff moves for an order striking out the answer of the defendants and granting the plaintiff summary judgment. Defendant Marta, Inc. moves for summary judgment in its favor, asserting that it will have no dealings with any officer of S. Merige, Inc. until the litigation is determined.

This is an action for declaratory judgment. It appears that the plaintiff loaned money to a corporation named S. Merige, Inc., of which the defendants, Jacobs and Merhige, were officers. To secure his loan, the plaintiff exacted assignments of stock held by Jacobs and Merhige in the debtor corporation; and also their signed resignations as officers and directors, to become effective upon any default in the corporation’s obligation to the plaintiff. One of the corporation’s assets was an investment in defendant, Marta Cooperative, Inc., sued herein as Marta, Inc. This investement is in corporate stock of Marta, which Marta holds to secure any obligations due it from S. Merige, Inc. S. Merige, Inc. defaulted in its obligations to the plaintiff. Defendant Merhige resisted when the plaintiff sought to oust him from the corporation; and both litigants assert claims to the Marta, Inc. stock. This action seeks a determination that Merhige and Jacobs are no longer officers and that they have no authority to act for S. Merige, Inc. in its dealings with Marta.

The plaintiff is entitled to summary judgment as against the defendant Merhige. The affidavit interposed by defendant Merhige admits his signature to the agreement, to the assignment of stock and to his resignation; but he alleges that he was guided in all these matters by his associate Jacobs who was a lawyer, and that he did not knowingly sign the documents. He also contends that much of the indebtedness of S. Merige, Inc. is the sole obligation of Jacobs. Summary judgment against the defendant Merhige, declaring that he is not an officer, director or stockholder of S. Merige, Inc., and enjoining him from claiming to be such, is granted.

The plaintiff is also entitled to summary judgment as against the defendant Marta, Inc. It appears that Marta is in possession of assets of S. Merige, Inc., and plans to effectuate a repurchase requiring money payments to S. Merige, Inc.; that defendant Merhige has advised Marta, Inc. that he is an officer of the corporation and that therefore some relief against Marta, Inc. is authorized. Motion for summary judgment is granted in favor of the plaintiff against Marta, Inc. for limited relief only; that is, enjoining Marta, Inc. from transferring any assets of S. Merige, Inc. to the defendant Merhige.

The plaintiff is not entitled to summary judgment as against the defendant Jacobs who has not answered or appeared and is in default; therefore, summary judgment as against defendant Jacobs is denied merely because it is not the proper remedy. The action against Jacobs is severed and the plaintiff is authorized to take appropriate steps to obtain judgment against him on the basis of his default. The cross motion by Marta, Inc. for summary judgment is denied.

Settle order on notice.  