(DOWNLOAD) "Molasky Enterprises v. Carps" by Eastern District Missouri Court of Appeals " Book PDF Kindle ePub Free
eBook details
- Title: Molasky Enterprises v. Carps
- Author : Eastern District Missouri Court of Appeals
- Release Date : January 07, 1981
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 59 KB
Description
When Herbert M. Carp and Emile S. Carp as corporate officers endorsed their personal note and executed other papers on behalf
of the corporation to obtain a personal loan at Lindell Trust Company, they failed to obtain formal authorization or approval
from the board of directors of the Carps, Inc. Molasky Enterprises, Inc., the assignee of the second endorser, Allan Molasky,
paid a balance of $267,000 on the note to Lindell Trust and then sought to recover from Carps, Inc., as first endorser. The
case was tried to the court without a jury and judgment was rendered for the defendant Carps, Inc. A third party petition
brought by Carps, Inc., as defendant against Herbert M. Carp and Emile S. Carp was dismissed. Appeal was taken by plaintiff
Molasky seeking to reverse the trial court's decision and enter judgment on behalf of plaintiff. Because plaintiff contends
that the trial court erred in entering its judgment for the reason the evidence clearly established that Herbert and Emile
Carp had authority to bind Carps, Inc., as first endorser on the note and an agreement of guaranty, we will consider the facts
and evidence in some detail. In December 1972 Herbert and Emile Carp, members of the board of directors and president and executive vice-president, respectively,
of Carps, Inc., applied for a personal loan in the amount of $267,000 from Lindell Trust. They told the bank that the loan
proceeds would be used to satisfy personal obligations to Carps, Inc., so the corporation's annual statement would not reflect
outstanding loans to officers. Lindell Trust informed Herbert and Emile who were brothers that they would not approve the
loan without endorsement. The Carp brothers then asked Allan Molasky of Molasky Enterprises to endorse the note. They told
Molasky that the funds were needed to repay a personal indebtedness to the Creve Coeur Bank and Trust Company. They also told
Molasky that Carps, Inc., was in the process of negotiating for refinancing and they wanted to avoid any default on their
personal obligations during these negotiations. Molasky consented and placed his endorsement on the note after it was executed
by Herbert and Emile in their personal capacity and after Herbert Carp had endorsed the note in the name of the corporation.
Molasky testified that he did not ask for a corporate resolution authorizing the endorsement of Carps, Inc., on the note.
Neither did he inquire from any of the other members of the board of directors whether Herbert as president had authority
to bind the corporation. He explained that he knew Carps, Inc. was a closely-held family corporation and that they ran their
business in an informal and casual manner. He relied on the oral assurances of the two brothers that they had authority to
execute documents on behalf of the corporation.