Fink v. Montgomery Elevator Co. of Colo., 21289

• Decision Date: 27 December 1966
• Docket Number: No. 21289,21289
• Citation: 161 Colo. 342,421 P.2d 735
• Parties: Victor FINK, Plaintiff in Error, v. MONTGOMERY ELEVATOR COMPANY OF COLORADO, Defendant in Error.
• Court: Colorado Supreme Court

Page 735

421 P.2d 735

161 Colo. 342

Victor FINK, Plaintiff in Error, v. MONTGOMERY ELEVATOR COMPANY OF COLORADO, Defendant in Error.

No. 21289.

Supreme Court of Colorado, In Department.

Dec. 27, 1966.

Edison & Berman, Jorge E. Castillo, Denver, for plaintiff in error.

Belknap & McGarry, Denver, for defendant in error.

SUTTON, Chief Justice.

Plaintiff in error, Victor Fink, one of several defendants in the trial court, was sued personally and as a purported partner by Montgomery Elevator Company of Colorado for services rendered by it under contracts for service and repairs of elevators in Denver parking facilities. He will be referred to herein as defendant or Fink. Defendant in error will be referred to as plaintiff or Montgomery. The trial court rendered judgment in the amount of $4,000 against Fink individually, dismissing claims against the other defendants.

On writ of error Fink alleges several grounds for reversal only one of which we need to consider, i.e., that it was error to find him personally liable on a contract entered into by Den-Park Company, a Minnesota corporation. He urges in this connection that:

(a) The evidence shows that he was acting as an agent of the corporation in executing the agreements; and

(b) That the plaintiff failed to establish grounds for application of the alter ego doctrine used by the trial court to hold him as a stockholder personally liable for a debt of the corporation.

The record discloses that Montgomery filed suit against Victor Fink, William Fink, Ida Fink and Eva Fink individually and each of them as partners under the name of V & W Parking Stations. Montgomery was able to obtain personal service only on William and Victor Fink. Den-Park Company then intervened as a party defendant and counterclaimed for $6,000, which the trial court in effect allowed as a set-off in the final judgment against defendant.

The evidence showed that the four individual defendants obtained a lease of certain parking facilities from the City and County of Denver. Victor and William Fink and three others then formed a corporation named Den-Park Company and the lease was assigned to that corporation. In addition to the two Finks, there were four Klein brothers who invested and became stockholders in Den-Park Company. The Kleins and Finks each had one-half of the capital involved in Den-Park.

Prior to obtaining the lease and prior to the formation of Den-Park, Fink received a letter from W. A. Quinn on behalf of William Colin Kirk & Associates, Co., offering to negotiate for servicing of the garage elevators should Fink be awarded the lease. After signing the lease, negotiations for both a service contract and a repair contract were entered into between Montgomery represented by Quinn and Den-Park represented by Fink. The service contract was sent to Den-Park Company and was accepted in the name of 'Den-Park Co. by Victor L. Fink'; it was then signed by Quinn as agent for William Colin Kirk & Associates, Co. Shortly after this contract was executed, William Colin Kirk & Associates, Co. changed its name to Montgomery Elevator Company of Colorado, which was the plaintiff in the trial court.

Montgomery thereafter commenced work on the elevators. It was soon discovered that much more extensive repairs were needed than had originally been anticipated. Periodic invoices were sent by Montgomery to Den-Park, some of which were paid by the latter's checks. Den-Park, through Fink, complained on a number of occasions that the billings were greatly in excess of the amount agreed upon in the contract. Ultimately and resultantly no further payments were made to Montgomery. Montgomery urges that at all times in question it had dealt with Fink individually; that at no time did it have notice that Den-Park was a corporation; and that even if Den-Park were a corporation, it was acting as an agent of Fink in operating under the lease since the lease ran to the Fink brothers and their wives rather than to Den-Park. Plaintiff also urges that Den-Park was under-capitalized when it began and was organized as a mere shell for the incurring of debts. In an attempt to prove this assertion (assuming it was material) in the trial court, it offered testimony to the effect that Den-Park Company had paid.$19,000 for the first month's rent under the lease and had placed an additional.$19,000 in escrow for the last month's rent; and that this left approximately $7,000 of the total capitalization for operation of the lease.

I.

As to whether the evidence shows that Fink was acting as an agent of Den-Park Company in executing the agreements, we must agree with Fink that the evidence so discloses.

Though plaintiff asserts that at no time did it have such notice, the record clearly shows that the name of the principal, Den-Park Company, Was fully disclosed to Montgomery Elevator Company. Every document placed in evidence which deals with the work to be done by Montgomery or payment therefor bears the name of Den-Park Company, with the exception of plaintiff's Exhibit G, a letter from Fink to William Colin Kirk & Associates, Co., predecessor of Montgomery, in response to an offer to negotiate a service contract. This, however, was written prior to the formation of Den-Park Company.

Each of the numerous invoices constituting plaintiff's Exhibit L, reads:

'Bill to Den-Park Company

1428 Champa St.

Denver, Colorado.'

Plaintiff's witness Quinn, the agent of Montgomery with whom all dealings were had, so testified and agreed that 'the contract is made to Den-Park Company' and that the payments made were by that company only.

Here all the evidence, both testimonial and documentary, shows that Montgomery and its agent Quinn considered themselves to be dealing with Den-Park rather than Fink. The service agreement itself, which is plaintiff's Exhibit B, on its face gave sufficient notice that the seller here was dealing with someone other than the individual signing it. This agreement, offered and sent to Den-Park rather than to Fink, was signed:

'Accepted: William Colin Kirk &

Den-Park Co. Associates, Co.

By: Victor L. Fink By: W. A. Quinn

Approved Nelson Dick.'

The generally accepted rule is that a party is not liable upon a contract signed by him on behalf of another, assuming proper authorization to act, when he has given notice to the third party that there is A principal for whom he acts and also notice of the name or identity of the principal. Condit v. Merritt Printing & Stationery Co., 67 Colo. 185, 184 P. 381 (1919); Charles Nelson Co. v. Morton, 106 Cal.App. 144, 288 P. 845 (1930); Austin, Nichols & Co., Inc. v. Gross, 98 Conn. 782, 120 A. 596 (1923); 3 C.J.S. Agency § 216(c); 2 Am.Jur., Agency, § 241.

The law is that any ambiguity in an instrument whereby it is sought to hold a purported agent personally liable, can be explained by parol evidence. In such a situation the court will take the entire contract into consideration, not the signature alone. See Fricke v. Belz, 237 Mo.App. 861, 177 S.W.2d 702 (1944); Butterick Co. v. Molen, 192 Okl. 602, 138 P.2d 89 (1943); Pennsylvania Co. for Insurance of Lives and Granting of Annuities v. Wallace, 346 Pa. 532, 31 A.2d 71, 156 A.L.R. 1 (1943); Consumers' Twine & Machinery Co. v. Mt. Pleasant Thermo Tank Co., 196 Iowa 64, 194 N.W. 290 (1923); Hurricane Milling Co. v. Steel & Payne Co., 84 W.Va. 376, 99 S.E. 490, 6 A.L.R. 637 (1919).

The trial court seemed to rely upon the fact that Fink added nothing to his signature which would indicate the capacity in which he signed the contracts. We hold, however, that the addition of such words as 'agent' or 'm...