Cleveland Chemical Co. of Arkansas, Inc. v. Keller, CA

Decision Date24 September 1986
Docket NumberNo. CA,CA
Citation19 Ark.App. 7,716 S.W.2d 204
Parties, 2 UCC Rep.Serv.2d 191 CLEVELAND CHEMICAL COMPANY OF ARKANSAS, INC., Appellant, v. M.G. KELLER, Appellee. 86-107.
CourtArkansas Court of Appeals

Shaver, Shaver & Smith by Tom B. Smith, Wynne, for appellant.

Davidson Law Firm by Charles Darwin Davidson, Little Rock, for appellee.

CLONINGER, Judge.

Appellant, Cleveland Chemical Company of Arkansas, Inc., brought suit against the appellee, M.G. Keller, for $235,597.76, based on a guaranty signed by appellee to secure a corporate line of credit. The lower court dismissed the appellant's complaint, finding that the appellee signed the guaranty in a corporate capacity and not individually. From that ruling appellant brings this appeal, arguing that the lower court erred in failing to find appellee individually liable on the guaranty. We agree and reverse.

Appellee, M.G. Keller, is the primary shareholder and president of Keller Chemical Company; the only other shareholder and officer of the corporation is appellee's wife. Appellee purchased various chemical products from the appellant for resale, and on July 30, 1974, appellee signed a guaranty in order for appellee's corporation to receive a line of credit from appellant. The guaranty was executed as follows: "KELLER CHEM. CO., BY: /s/M.G. Keller". It appears that the lower court incorrectly applied the law, and the order dismissing appellant's claim should be reversed.

Arkansas Statutes Annotated Section 85-3-403(2)(b) (Add.1961) provides:

An authorized representative who signs his own name to an instrument, except as otherwise established between the immediate parties, is personally obligated if the instrument names the person represented but does not show that the representative signed in a representative capacity....

The Arkansas Supreme Court in Fanning v. Hembree Oil Co., 245 Ark. 825, 434 S.W.2d 822 (1968) held that a corporate secretary's typing the name of the corporation above his signature on a note without anything to indicate his office or the capacity in which he signed was insufficient to avoid personal liability on the part of such officer. A similar holding was reached in United Fasteners, Inc. v. First State Bank of Crossett, 286 Ark. 202, 691 S.W.2d 126 (1985), where the Supreme Court held that a signature is only in a representative capacity if the name of the organization is preceded or followed by the name and office of an authorized individual. Here,...

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3 cases
  • Mollenhour v. State First Nat. Bank of Texarkana, CA
    • United States
    • Arkansas Court of Appeals
    • April 19, 1989
    ...notes, established that he only signed the notes in his representative capacity. We do not agree. In Cleveland Chemical Co. of Arkansas, Inc. v. Keller, 19 Ark.App. 7, 716 S.W.2d 204 (1986), an action was brought against the appellee based on a guaranty signed by the appellee to secure a co......
  • Eddins v. Style Optics & Dobbins
    • United States
    • Arkansas Court of Appeals
    • September 27, 2000
    ...argument that the probate court erred in finding that both appellees filed claims. Citing Cleveland Chem. Co. of Arkansas, Inc. v. M.G. Keller, 19 Ark. App. 7, 716 S.W.2d 204 (1986), the personal representative argues that appellees' claims are invalid because Sidney Dobbins is the only per......
  • Bass v. Service Supply Co., Inc.
    • United States
    • Arkansas Court of Appeals
    • September 28, 1988
    ...First American National Bank v. Coffey-Clifton, Inc., 276 Ark. 250, 633 S.W.2d 704 (1982). See Cleveland Chemical Co. of Arkansas, Inc. v. Keller, 19 Ark.App. 7, 716 S.W.2d 204 (1986). A guaranty contract may be supported by sufficient consideration so long as there is a benefit to a princi......

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