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Snukal v. Flightways Manufacturing

Contract was binding on corporation when individual holding several corporate offices executed contract on behalf of corporation, even though contract identified individual solely as president.

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The full case caption appears at the end of this opinion.

The lessor of a personal residence filed this action in the municipal court against the lessee, a corporation, alleging breach of a written lease agreement executed by the president of the corporation. Following judgment in favor of the lessor in the municipal court, and affirmance in the appellate department of the superior court, the Court of Appeal directed that the case be transferred to itself in order to resolve a single issue of statutory construction pursuant to its authority under Code of Civil Procedure section 911 A to secure uniformity of decision or to settle important questions of law. Contrary to the conclusion reached by the appellate department, the Court of Appeal determined that Corporations Code section 313, which precludes a corporation from challenging an agreement based upon lack of authority when the agreement has been executed on behalf of a corporation by specified corporate officers, was inapplicable to the lease agreement here in question. The Court of Appeal then directed that the case be remanded and the remittitur transmitted to the appellate department of the superior court in order to permit that court to determine whether, instead, the lease agreement was binding upon the corporation under traditional, common law contract doctrine.

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