1. This contract was between friends. Do you think that Crozier expected that Sauers would be personally liable for repayment of the loan?

2. Can Crozier sue T & M Corp. for repayment of the loan?

3. What could Crozier have done to insure that Sauers was personally liable for the debt?

Thomas Sauers asked a family friend, Robert Crozier, to lend him money to expand his auto glass business. Crozier loaned $180,000 pursuant to an oral agreement. The loan was to purchase an existing auto glass company and to be a down payment on two buildings for corporate purposes. Crozier gave Sauers four checks made out to T & M Corp. The buildings were never purchased but Sauers testified that the funds were used to cover operating expenses of T & M Corp. Crozier sued for repayment of the loan amount, maintaining that Thomas Sauers was personally liable for the repayment of the loan.

JUDICIAL OPINION

Here, the parties understood that the funds were intended to be used for corporate purposes, were advanced to the corporation, were deposited in the corporation’s account, and were actually used for corporate purposes. Furthermore, the plaintiff failed to adduce evidence that Sauers agreed to be personally responsible for repaying the loan prior to the advancement of the funds. The complaint against Sauers must be dismissed.