Molasky Enterprises, Inc. v. Carps, Inc. case brief
Molasky Enterprises, Inc. v. Carps, Inc. case brief summary
615 S.W.2d 83 (1981)
Plaintiff second endorser on a
promissory note appealed an order of the Circuit Court of St. Louis
County (Missouri), which entered judgment in favor of defendant
corporation in the second endorser's action to recover amounts he
paid on the note.
CASE FACTS The first endorsers on the note were
two brothers who were members of the board of directors and officers
of the corporation. The note secured a personal loan that the
brothers told the lender was to be used to pay off certain of the
corporation's debt. Although the lender asked for a corporate
resolution authorizing the loan application, none was ever provided.
The lender did require an additional endorser. When the brother's
defaulted on the note, the second endorser paid the balance due and
sought recovery from the corporation as first endorser. The second
endorser contended that the brother's actions bound the corporation
and established its liability under the note.
The court affirmed
holding that the actions of the brothers were not sufficient to bind
the corporation to the note.
The brothers had no actual authority to
pledge the assets of the company themselves and they never obtained a
corporate resolution authorizing the loan.
Further, the evidence did
not support a finding of apparent authority, ratification, or
estoppel such as would bind the corporation to the note.
The court affirmed the judgment of the trial court. Recommended Supplements for Corporations and Business Associations Law
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