The Crittenden Automotive Library

Topics: Stutz, Allan A. Ryan

RYAN SISTER-IN-LAW SUES IN STUTZ DEAL

Publication: The New York Times
Date: 5 January 1922

Asks $1,755,769 Profits as Her Share in Corner of Auto Stock.

SHE CHARGES BAD FAITH

Declares She Gave Up a Fortune by Refusing to Sell and Got No Reward.

Caroline S. Ryan, wife of Clendennin J. Ryan and sister-in-law of Allan A. Ryan, started suit yesterday to recover $1,755,769.09 from Allan A. Ryan.

She alleges that she went to the rescue of her brother-in-law during the critical period of the famous Stutz corner on his verbal agreement that she should share in the profits, but that he has declined to live up to his agreement.

Mrs. Ryan, according to her complaint, owned 2,000 shares of Stutz stock during the operations which ended in the Stutz corner. Those who were on the losing side of that operation were paying up to $700 for blocks of stock which were independently owned. According to her complaint, Mrs. Ryan could have made a large fortune by selling at that time, but she refrained from doing so, because Allan Ryan induced her to leave the stock with him, promising that he would pay her for every share of her stock the settlement price which was exacted from the “shorts.”

On the other hand, it was pointed out, had her stock been sold to “shorts” it would have enabled them to make a partial escape from their difficult position and would have weakened the corner to that extent.

No Written Agreement.

While it is not alleged that there was any written agreement between Ryan and his sister-in-law, it is alleged that the facts speak for themselves, indicating that great service was rendered to Ryan, implying on the face of it that an understanding existed that fair compensation should be made.

Mrs. Ryan, the plaintiff, was asked yesterday to explain the details of the transaction, but she refused to talk for publication. Martin Conboy of the firm of Griggs, Baldwin & Baldwin, which brought the suit, said that the nature of the reply which Mr. Ryan would make was not known to them.

A violent family quarrel is said to have occurred when Mrs. Clendennin Ryan found that she had not been credited on the books of Allan Ryan's firm with the profits of the Stutz corner and when she came to understand that it was not intended to make her a benificiary of the high settlement price which was forced from the “shorts.”

The settlement price was $550 a share. At this price Mrs. Ryan would have received $1,100,000. According to her allegations, she was to have had this sum, not for the purchase of her stock, but for the mere act of withholding it from the market. She alleges therefore that the breach of agreement, not only cost her the promised $1,100,000, but the right to have sold her stock immediately. Mrs. Ryan alleged that she made a demand for a settlement in December, 1920, when she might have sold the Stutz stock for several hundred thousand dollars and that it was denied her.

Others Named in Suit.

Kenneth R. Howard, a partner of Allan A. Ryan, is also named in the suit. Other defendants are the Guaranty Trust Company and Alvin Untermyer, trustees. The complaint charges Ryan and Howard with “wrongfully converting and delivering to the defendant trustees her securities,” and adds that “said trustee received the same with notice of plaintiff's rights and with full knowledge of the same, and now are, or one of them is, in possession of the same.”

Allan Ryan was ousted from the Stock Exchange on July 24, 1920, in connection with the spectacular Stutz corner, an action which Ryan attributed to spite. He alleged that the corner was forced by his enemies and that he took no action except what was necessary to protect himself. It was reported later that his success had been won at a heavy cost and that the struggle to keep the corner intact had been a heavy drain on his resources, resulting in the formation of a committee of bankers to protect his interest. This was denied by Ryan, who asserted that his financial position had never been a serious one.

The complaint of his sister-in-law against Ryan is closely parallel to the suits brought by Mrs. I. Townsend Burden and Mrs. Eudora F. Walsh. When Stutz prices were soaring, they allege that they were persuaded by Ryan to leave their stock with him, instead of selling it to “shorts,” on his promise that they would share in the huge profits that were predicted at the settlement. They alleged that Ryan had afterward declined to make good his promises. Mrs. Burden asserted that she had been defrauded of $328,141 by Ryan, while Mrs. Walsh asserted that she had lost $306,222 at his hands.