Formica Construction Company was the general contractor in the renovation of a restaurant owned by Mossi Inn
Question:
Formica Construction Company was the general contractor in the renovation of a restaurant owned by Mossi Inn Inc. Mossi is a closely held corporation whose sole officers and shareholders are the parents of Daniel Mills. Mills is an employee of Mossi, manages the restaurant, and served as the authorized agent of the company in dealing with Formica Construction. At the time the construction loan for the renovation was being converted into a mortgage on the property, the loan proceeds were insufficient to cover $37,000 Formica was owed for extras on the project. Mills signed a negotiable promissory note payable to the order of Formica in which he promised to pay the $37,000, but he did not indicate he was signing in a representative capacity on behalf of Mossi. When a portion of the note remained unpaid, Formica brought suit against Mills seeking payment of the balance. Mills claimed that he was only an employee of Mossi and had signed only as a representative. On these facts, is Mills personally liable for repayment of the note?
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Business Law The Ethical Global and E-Commerce Environment
ISBN: 978-1259917110
17th edition
Authors: Arlen Langvardt, A. James Barnes, Jamie Darin Prenkert, Martin A. McCrory