R. M. S. Corp. v. Baldwin, 15244

• Citation: 576 P.2d 881
• Decision Date: 09 March 1978
• Docket Number: No. 15244,15244
• Parties: R. M. S. CORPORATION, dba Gan Roofing Supply, Plaintiff and Respondent, v. Ross BALDWIN, Defendant and Appellant.
• Court: Supreme Court of Utah

Page 881

576 P.2d 881 R. M. S. CORPORATION, dba Gan Roofing Supply, Plaintiff and
Respondent,
v.
Ross BALDWIN, Defendant and Appellant. No. 15244. Supreme Court of Utah. March 9, 1978.

Page 882

Don Blackham of Blackham & Boley, Granger, for defendant and appellant.

Richard L. Maxfield, Provo, for plaintiff and respondent.

ELLETT, Chief Justice:

The respondent, as plaintiff below, sued Mr. Baldwin on a check he had given in payment of a debt owed to R. M. S. The account was carried on respondent's books in the name of "Exterior Builders." Exterior Builders is an assumed name under which Rossco Enterprises, Inc., a corporation of Utah, does business.

The officers of respondent testified that they knew Mr. Baldwin and thought he was the one who did business under the name of Exterior Builders. They advanced credit to him and knew nothing about Rossco Enterprises, Inc.

Evidence was given that certain officers and employees of respondent had formerly worked for another company which dealt with Mr. Baldwin and knew or should have known that the entity, Exterior Builders, was the assumed name of Rossco Enterprises, Inc. The conflict in the evidence was properly resolved by the trial court, sitting without a jury, as follows:

That the defendant is personally liable to the plaintiff in the sum of $1,936.68 together with interest thereon for goods and material delivered to the defendant on or prior to October 10, 1975.

That the defendant is estopped to assert that plaintiff was doing business with a corporate entity.

The check given in final payment of the account was not good and would not clear the bank on which it was drawn. It was signed by Ross Baldwin with the words "Exterior Builders" printed above the signature.

The law is stated in 19 Am.Jur.2d, Corporations, Sec. 1342 to be as follows:

. . . Where directors or officers contract with a third person who is unaware of the existence of the corporation and to whom no disclosure of its existence is made, the director or officer is personally liable on the contract.

Mr. Baldwin was an original incorporator of Rossco Enterprises, Inc., and one of its largest stockholders. The record does not indicate what office he held in that corporation, but he was the principal figure in dealing with the respondent in the instant matter. In fact, counsel for the appellant asked this question:

Q. At any time, Mr. Baldwin, did you indicate to Mr. Riley (secretary-treasurer of respondent) or Mr. Memmer...