Mok v. Iroquois Building Co.
Docket: Docket No. 670
Court: Michigan Court of Appeals; September 27, 1966; Michigan; State Appellate Court
Mark Abend and Raymond Husic, officers of Iroquois Building Company, issued four promissory notes of $1,000 each to Ira E. Mok, representing Mok Modern Lumber Co., to partially secure a $9,000 debt owed by the company. The notes were signed on the company’s checks without specifying the capacity in which Abend and Husic were signing. Due to this ambiguity, the trial court permitted the introduction of parol evidence indicating that the defendants signed in a representative capacity rather than as individuals. The plaintiff appealed a judgment of no cause for action against Abend and Husic personally, arguing that the trial court erred in admitting parol evidence that altered the terms of the notes. The applicable law was based on Michigan's negotiable instruments law, which states that if a signature indicates a representative capacity and the signer is duly authorized, they are not personally liable. However, merely indicating agency without disclosing the principal does not exempt the signer from liability. The court ruled that parol evidence is admissible to clarify ambiguous situations regarding the capacity in which a signature was made, especially when the original parties to the transaction are involved. In this case, the signatures created ambiguity, allowing the introduction of evidence to establish that the notes were intended as obligations of the principal, not the agents. The judgment was affirmed, with costs awarded to the appellees, and the concurrence of Judges Holbrook and McGregor was noted.