Irving Weis & Co. v. Offenberger

• Decision Date: 16 November 1961
• Parties: IRVING WEIS AND COMPANY, Plaintiff, v. Martin OFFENBERGER, Defendant.
• Court: New York City Municipal Court

Page 1001

220 N.Y.S.2d 1001

31 Misc.2d 628

IRVING WEIS AND COMPANY, Plaintiff, v. Martin OFFENBERGER, Defendant.

Municipal Court of City of New York, Borough of Brooklyn Fifth District.

Nov. 16, 1961.

Kalman V. Gallop, New York City, for plaintiff.

Norman Annenberg, New York City, for defendant.

MURRAY H. PEARLMAN, Justice.

Plaintiff is a New York Stock Exchange brokerage firm. Defendant is its former customer, being sued in this action for a debit balance resulting from his trading, on margin, with the plaintiff. Plaintiff also seeks to recover the value of 100 shares of stock registered in defendant's name, which plaintiff sold to liquidate defendant's account after the defendant refused to execute the required assignment or power of attorney to effectuate the transfer thereof to the purchaser. The amount and accuracy of defendant's balance was conceded by him in his examination before trial and no question is raised by him with respect to the sale or the value of the aforesaid 100 shares of stock.

Defendant resists plaintiff's application for summary judgment on a defense and counterclaim which alleges that 'During the period February 1959 until and including October 1960 the plaintiff deliberately and wilfully induced the defendant to engage in trades and transactions in securities with the plaintiff by extending to the defendant excessive credit for the purchasing and carrying of, and trading in, securities, in circumvention of the credit and margin requirements prescribed by the Board of Governors of the Federal Reserve System in Regulation T, of the Regulations of said Board, said regulation being promulgated pursuant to the Securities Exchange Act of 1934, and particularly to Sections 7 and 8A of that Act [15 U.S.C.A. §§ 78a et seq., 78g, 78h(a)]; to the damage of the defendant in the sum of $2582.45.'

In addition to the pleadings and the moving and opposing affidavits of the parties to this action, the plaintiff has submitted its bill of particulars attached to which is a complete transcript of defendant's trading account with the plaintiff, and the transcript of defendant's examination before trial, all of which were duly considered in the determination of the instant motion.

In challenging this motion for summary judgment, defendant has failed to convince the Court that genuine issues of fact having merit have been raised. A shadowy semblance of an issue is not enough to defeat the motion. Rule 113, Rules of Civil Practice, would serve no useful purpose if frivolous and transparently insufficient proofs such as have been brought forward here were held to create a triable issue. Richard v. Credit Suisse, 242 N.Y. 346, 152 N.E. 110, 45 A.L.R. 1041; Dwan v. Massarene, 199 App.Div. 872, 192 N.Y.S. 577; Strasburger v. Rosenheim, 234 App.Div. 544, 255 N.Y.S. 316; Gravenhorst v. Zimmerman, 236 N.Y. 22, 139 N.E. 766, 27 A.L.R. 1465; Hanrog Distributing Corp. v. Hanioti, 10 Misc.2d 659, 54 N.Y.S.2d 500. As to the instant motion, the purpose of summary judgment procedure is to search out the evidentiary facts and determine the existence of an issue from them. Bald conclusory assertions, even if believable, are not enough. Kramer v. Harris, 9 A.D.2d 282, 193 N.Y.S.2d 548, 550.

A reading of defendant's affidavit fails to reveal any evidentiary or other facts establishing that plaintiff 'deliberately and wilfully' induced the defendant to engage in trades with the plaintiff. See Sec. 32, Regulation 'T.' On the contrary, the defendant's examination before trial patently establishes the converse, for therein defendant has admitted that in his trading with the plaintiff all decisions for purchases and sales were effected by him voluntarily either on his own investigation or on the reliance on others than the plaintiff. Moreover, defendant's affidavit, aside from the bald conclusion that he 'lost' the sum of $2,582.45, fails to establish any proximate or causal relationship to the claimed violation of Regulation 'T', or as to the manner in which defendant's alleged damages were consequentially occasioned by or resulted therefrom. In short, there is no evidentiary showing that plaintiff's alleged violation has caused any injury to the defendant.

Aside from the foregoing deficiencies and insufficiencies noted, it may be well to state not every violation of even a statutory command or prohibition gives rise to civil liability to one harmed by the violation or carries with it as a penalty an inability to enforce civil rights arising from acts which would have been lawful except for the statute; and a fortiori mere violation of a rule of an exchange does not give rise to such civil liability or entail inability to enforce civil rights. Marrow Mfg. Corp. v. Eitinger, 296 N.Y. 760, 70 N.E.2d 557; Raymond Concrete Pile Co. v. Federation Bank & Trust Co., 288 N.Y. 452, 462, 43 N.E.2d 486, 491; Manufacturers' Trust Co. v. U. S. Mortgage & Trust Co., 244 N.Y. 550, 155 N.E. 893; Rosasco Creameries Inc. v. Cohen, 276 N.Y. 274, 11 N.E.2d...