N. Y. Rep.] Opinion of the Court, per CHASE, J. it on said August 11, and the money paid and securities transferred as per the option agreements. On that day an agreement was entered into by and between the defendant, said Dresser, and said Nixon party of the first part, one Charles M. Schwab of the second part and Harris Gates & Company of the third part relating to the sale of certain specified stocks of the shipbuilding company and the disposition of the proceeds thereof in which contract the defendant's position is wholly that of a trustee. The officers of the shipbuilding company and the owners of the bonds and stock of the company or a large part of them desired for their mutual protection to enter into a pooling agreement in regard to the sale of such bonds and stock, and a proposed agree ment was prepared, of which the following is a copy of the material part, viz. : "Agreement made this day of August 1902 by and between Thomas C. Clark party of the first part (hereinafter called the manager') and the several vendors herein named parties of the second part (hereinafter called the ' vendors.') "WHEREAS the Manager represents certain underwriters and other parties who are entitled to bonds and preferred and common stock of United States Shipbuilding Company and is authorized to sell and dispose of the said bonds and stocks; and "WHEREAS the vendors are the owners of certain amounts of said bonds and stocks of said company; and "WHEREAS the said Manager representing said underwriters and other parties and the vendors wish to sell and dispose of a portion of said bonds and stocks and to have the Manager take entire control of such sale for the pro rata benefit of all the parties hereto; Now This Agreement Witnesseth: "First. The vendors hereby agree that they will deposit with the Trust Company of the Republic the amount of bonds and preferred and common shares of the United States Shipbuilding Company set opposite their respective names. Opinion of the Court, per CHASE, J. [Vol. 196. "Second. That the Manager shall have the right at any time or times prior to the 25th day of August, 1903, to sell and dispose of said bonds and stocks at public or private sale and at such prices as he may deem expedient, provided that the prices thereof shall not be less than per cent of the par value of said bonds, per cent of the par value of said preferred stock, and per cent of the par value of said common stock. The proceeds of such sale shall be deposited with the Trust Company of the Republic to the credit of the Manager. "Third. Until the 25th day of August, 1903, or until the final distribution hereunder prior to said 25th day of August, 1903, the said Manager for account of the parties hereto shall have power to purchase and resell the said bonds and stocks in his discretion and may apply toward any such purchases any sum or sums realized from any previous sales of bonds and stocks and make advances or procure loans and secure the same to such amounts and in such manner as from time to time he may deem expedient for any of the purposes of this agreement. * * The plaintiff received from the sale to the shipbuilding company of the Harlan & Hollingsworth Company, one of the constituent companies, a substantial amount of the bonds and stocks of the shipbuilding company. He declined to sign the proposed pooling agreement from which we have quoted, but insisted that if he joined in the pooling agreement he should have a guaranty signed by a responsible party. The vice-president of the defendant, who subsequently signed the writing with the plaintiff, made at least two trips to Wilmington, the home of the plaintiff, to induce him to join the pooling agreement. There was considerable correspondence between them, all of the letters from the plaintiff being addressed to said vice-president and the letters to the plaintiff being signed in the name of the defendant by such vice-president or one Babcock, an assistant secretary associated with him in the branch office of the defendant. The agreement with the plaintiff in suit was signed by such vice-president N. Y. Rep.] Opinion of the Court, per CHASE, J. with the knowledge and direction of the president. The negotiations with the plaintiff and the execution of the agreement as stated, although open and public at the defendant's branch office, were without the knowledge of the defendant's board of directors or officers except as stated and to such extent they were secretly done. It is unnecessary for the purposes of this decision to relate the details of the transactions occurring after September 26, 1902, except in a few particulars. In October a syndicate was formed to furnish money to pay said loans of August 11, 1902, and thus relieve the makers thereof from liability thereon, and also at the same time relieve the trust company from any further claim of liability on its part by reason of its being the maker or the guarantor of any or all of such loans. In January, 1903, the plaintiff tendered to said vice-president of the defendant at the defendant's branch office the bonds and securities mentioned in the writing with him. They were declined by said vice-president because, as alleged, of insufficient space in the vaults of the defendant to store them and the plaintiff asserts that he held such bonds and stocks for the benefit of the defendant thereafter. Prior to June, 1903, the president and said vice-president of the defendant during 1902, severed their connection with the defendant and other persons took their places. On June 3, 1903, the plaintiff's attorney sent to the defendant a copy of the contract on which he claims and inquired why the defendant did not take possession of the securities held by the plaintiff for the alleged benefit of the defendant. An investigation of the matter was then made by the defendant and a letter was on June 16 written to the plaintiff in substance denying the validity of the plaintiff's alleged contract. This action was then commenced. Neither the minutes of the board of directors, the executive committee nor the stockholders of the defendant contain any reference whatever to the guaranty of said notes or to the alleged contract with the plaintiff. It appears beyond controversy that no resolution authorizing the execution of the Opinion of the Court, per CHASE, J. [Vol. 196. plaintiff's alleged contract was ever considered or passed by either of said bodies. All of the directors and members of the said executive committee and officers of the defendant that were sworn other than the president and said vice-presi dent testified that they never heard of the plaintiff's claimed agreement until after the letter of June 3, 1903. After September, 1902, the affairs of the defendant' were investigated by a committee of its board of directors, and a firm of certified accountants were employed in the fall of 1902 to examine the affairs of the corporation and make a report to its board of directors, and in neither case did they find the alleged agreement which it is asserted was left with said vice-president, nor were they informed, nor did they ascertain in any manner whatsoever, that there was such an alleged outstanding agreement. The explanation of the president and said vice-president is that they and each of them did not suppose that the agreement was binding upon the defendant because of the failure to obtain the assent of all of the outstanding holders of bonds and stocks of the shipbuilding company to such pooling agreement. It is also true, as appears from the record, that the proposed pooling agreement which we have quoted herein was never signed by all of the holders of the stocks and bonds and never became or was recognized as an effective agreement between the bond and stockholders of said shipbuilding company, and said bonds and stocks were not kept from the open market or a minimum selling price therefor maintained. Under the circumstances that we have disclosed we return to the question as to whether the execution of the alleged agreement with the plaintiff was within the authority of the defendant, and also whether such vice-president had authority to execute said agreement even if the defendant had authority to enter into it. What was the purpose of the alleged agreement with the plaintiff? It was not that the defendant should become the purchaser of such bonds and stock, but it was to bring the plaintiff into the pooling agreement to protect the price N. Y. Rep.] Opinion of the Court, per CHASE, J. thereof. Both parties to said agreement promised to co-operate with the syndicate, and it was by the express terms of said agreement intended as an aid to the syndicate agreement. The defendant was not to profit directly by the sale of the plaintiff's bonds and stock in any event. It had no direct interest in the said agreement. The defendant to induce the plaintiff to enter into the agreement guaranteed at a minimum price within a specified time "the sale of all of his said securities * * whether through the efforts of said syndicate or otherwise." * The defendant did not at any time become the owner of the bonds and stocks but the guarantor of a "future" and in substance of the prosperity and success of the shipbuilding company. It was a reckless and most unusual and hazardous agreement. The purposes of the defendant's organization are very material in determining the question as to its authority to make the alleged agreement. Where a corporation is organized for business or trading purposes and the only persons interested therein other than its business creditors are its stockholders and their only interest therein is to secure dividends upon their investment, the question of ultra vires is of comparatively small importance except in behalf of the people of the state in their public capacity, and the courts treat the question as it relates to such a corporation very differently than they do in the case of a banking corporation. (Hess v. Sloane, 66 App. Div. 522; affd. on opinion below, 173 N. Y. 616.) A banking corporation occupies a different relation to the public in that it invites individuals to submit to it the possession and care of their money and property. All banking institutions occupy a fiduciary position. We have herein quoted the statutory definition of that form of a banking institution known as a trust company, and the statutory statement of its powers and the purposes of its organization. Such powers and purposes are primarily fiduciary. Their primary work is of a trust capacity and to a large extent they take the place of individual administrators, executors, guar |