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

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

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.

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 (general manager of respondent) that Exterior Builders was a d/b/a of Ross Baldwin?

A. Yes, sir.

Mr. Baldwin further testified that the only time he informed respondent that he was acting as a corporation and not in a personal capacity was after the check had been returned to the bank.

The appellant claims that the trial court should have granted his motion to dismiss the case at the conclusion of the evidence and that the evidence does not support the finding that the appellant is personally liable to the respondent.

These two claims are without merit. The trial judge was the one to decide what the facts were, and in a memorandum decision he stated:

To the extent the testimony of defendant conflicts with that of the witnesses, Riley and Memmer, the court chooses to believe the latter.

The appellant also claims that the court committed error at the end of the trial in permitting the respondent to amend its complaint to seek...