First National Bank and Trust Co. of Williston v. Scherr
North Dakota Supreme Court
467 N.W.2d 427 (1991)
- Written by Rich Walter, JD
Facts
The brothers and business partners Albinus and Pius Scherr (defendants) opened a checking account for the partnership at First National Bank and Trust Company of Williston (bank) (plaintiff). On the account signature card, the Scherrs indicated that the signature of either brother would be sufficient to bind the partnership in any transaction with the bank. The Scherrs later signed a partnership agreement barring either brother from lending or borrowing money for the partnership without the other brother’s consent. The bank requested a copy of the partnership agreement, which the bank retained in its files. Pius, acting for the partnership but without Albinus’s knowledge or consent, subsequently borrowed $65,000 from the bank. When the partnership defaulted on the loan, the bank sued both the partnership and the Scherrs for repayment. North Dakota’s version of the Uniform Commercial Code (UCC) applied to the case. The trial court entered summary judgment for the bank but was partially reversed on appeal. On remand, the trial court dismissed the bank’s claims against the partnership and Albinus. The bank appealed to the North Dakota Supreme Court.
Rule of Law
Issue
Holding and Reasoning (Meschke, J.)
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