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General Overseas Films, Ltd. v. Robin International, Inc.
United States District Court for the Southern District of New York
542 F. Supp. 684 (1982)
Charles A. Kraft was vice president and treasurer of The Anaconda Company (Anaconda) (defendant). Anaconda’s bylaws vested the authority “to sign checks, notes, drafts, bills of exchange and other evidences of indebtedness” in the treasurer. Kraft provided the bylaws and an annual report containing his photo to a representative of General Overseas Films, Ltd. (GOF) (plaintiff) as evidence of Kraft’s authority to bind Anaconda as a guarantor on loans made to Robin International, Inc. (Robin) (defendant). When GOF tried to collect from Anaconda in the United States District Court for the Southern District of New York, Anaconda claimed that Kraft did not have authority to guarantee the note. GOF admitted that Kraft did not have actual authority. GOF nevertheless argued there was apparent authority based on Anaconda’s actions, evidenced by the fact that many “sophisticated banks” entered into similar transactions based on Kraft’s apparent authority. In fact, those banks did not accept Kraft’s guarantee, and at least one requested approval from Anaconda’s board.
Rule of Law
Holding and Reasoning (Sofaer, J.)
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