A. L. Jackson Chevrolet, Inc. v. Oxley
| Decision Date | 10 May 1977 |
| Docket Number | No. 50034,50034 |
| Citation | 564 P.2d 633,1977 OK 85 |
| Parties | 21 UCC Rep.Serv. 1117 A. L. JACKSON CHEVROLET, INC., a corporation, Appellee, v. Bill OXLEY, d/b/a Guymon Motor Sales, Appellant. |
| Court | Oklahoma Supreme Court |
Ogden, Ogden & Board, Guymon, for appellee.
Dale, Wright & Brooks by William K. Brooks, Guymon, for appellant.
The question presented by this case is whether a corporate officer who signs a check on a corporate account without designating the capacity in which he signs is personally liable as the drawer of the check. This appeal involves an action for recovery on account. It arose when the appellee, A. L. Jackson Chevrolet, Inc., filed suit against the appellant, Bill Oxley, d/b/a Guymon Motor Sales, on open account for certain purchases of merchandise and parts in the amount of $798.52. The invoices reflect that the purchaser was Guymon Motor Sales, not Guymon Motor Sales, Inc. 1 The purchases were used in the Guymon Motor Sales, Inc.'s business and were paid for by two checks executed by its president, Bill Oxley, in his individual capacity. 2 It was admitted by appellant that the only thing appearing on the checks to indicate that a corporation was involved in the transaction was the appearance of the corporation's checking account number which was written on the checks by appellant. No corporate name was written, or printed, on the checks. Only Bill Oxley's signature appeared on the checks as the drawer, and there was no indication on either check that appellant was signing in his representative capacity as an agent of a corporation. Appellant presented no evidence of any representation by him that he was acting on behalf of any third party at the time he drew the checks. Oxley's testimony was that after the action was filed, he told appellee that he should not be suing him because it was a corporate debt, and that 'he thought' he had mentioned this one time before, but apparently not at the time the checks were drawn. The evidence of the appellee is that there was never any discussion concerning the debt being a corporate debt. The signature of Bill Oxley was not denied by a verified denial 3 and his answer contained only a general denial. There is no dispute that appellant's signature appears in the checks in question, nor is there evidence to substantiate an understanding between the immediate parties that appellant was acting in a corporate capacity.
The trial court after hearing the evidence found the corporate entity should be disregarded and entered judgment for A. L. Jackson Chevrolet, Inc. against Bill Oxley in his individual capacity.
Pursuant to 12A O.S.1971 § 3--307, when signatures are admitted or established, production of the instrument entitles a holder to recover unless the defendant establishes a defense, and unless specifically denied in the pleadings each signature is admitted. The burden of establishing the effectiveness of a signature is on the party claiming under it, but the signature is presumed to be genuine or authorized except where the action is to enforce an obligation of a purported signer who has died or become incompetent before proof is required. 4 It has long been the rule that one who places his unqualified signature on an instrument as maker or endorser will not be able to escape liability by a mere assertion that he intended to sign only as the representative of a corporation of which he is an officer and director. 5
Under the Uniform Commercial Doce, 12A O.S.1971 § 3--403(2)(b), 6 an unauthorized representative who signs his own name to an instrument, except as otherwise established between the immediate parties, is personally obligated if the instrument neither names the person represented nor shows that the representative signed in a representative capacity. 7 The burden of proof is on the maker to affirmatively show an understanding between himself and appellee that appellant would not be personally liable on the note. 8 To establish a defense, the appellant had the burden of proving the defense alleged in his answer by a preponderance of the evidence. 9 His answer was in the form of a general denial, and no specific defense was alleged. We find that the appellant failed to meet his burden of showing a defense to the action, and that the judgment of the trial court is supported by substantial evidence.
In a similar case, American Exchange Bank v. Cessna, 386 F.Supp. 494 (W.D.Okl.1974) it was determined that although the name, address, and telephone number of the maker's corporation appeared on checks where only the maker's personal signature appeared in the signature block without his corporate title, the maker was personally obligated on the check. 10
In this case the checks show only the number of the corporate bank account written in by the appellant. The signature of appellant does not show the title of his office, and there is no evidence to reflect that appellee had notice of the corporate entity. Therefore, the trial court was correct in determining appellant to be personally obligated on the checks.
AFFIRMED.
All Justices concur.
1 Because the invoices were made to Guymon Motor Sales, appellee did not have the pre-suit notice that appellant had incorporated. It is required by 18 O.S.1971 § 1.11(a) that:
The name of any corporation formed under this Act may be in any language, but shall be expressed in letters or characters of the English language, and shall end with the word 'corporation,' 'company,' 'incorporated,' or 'limited,' or an abbreviation of one of these words.
2 Appellee's Exhibit No. 2 includes the checks drawn by Bill Oxley:
3 12 O.S.1971 § 286 requires:
In all actions, allegations of the execution of written instruments and endorsements thereon of the existence of a corporation or partnership, or of any appointment of authority, or the correctness of any account duly verified by the affidavit of the party, his agent or attorney, shall be taken as true unless the denial of the same be verified by the affidavit of the party, his agent or attorney.
4 The burden of establishing signatures and defenses is delineated by 12A O.S.1971 § 3--307(1)(a), (b), (2):
(1) Unless specifically denied in the...
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...the form of the note, representative liability was "otherwise established between the * * * parties" (see Jackson Chevrolet v. Oxley, 564 P.2d 633, 635-636 (Okl.); Fanning v. Hembree Oil Co., 245 Ark. 825, 434 S.W.2d Clearly, the notes in this case fall within the situation contemplated by ......
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...only the account to be charged and not the name of entity for whom the individuals were signing the check); A.L. Jackson Chevrolet, Inc. v. Oxley, 564 P.2d 633, (Ok.1977) (Corporate officer found personally liable where he signed check in his own name and failed to indicate his representati......
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...an affirmative defense bears the burden of proving that defense by a preponderance of the evidence. See A.L. Jackson Chevrolet, Inc. v. Oxley, 1977 OK 85, 564 P.2d 633, 636; Okla. Natl. Bank v. Equitable Credit Finance Co., 1971 OK 104, 489 P.2d 1331, ¶ 18 Holcomb argues that this procedure......