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Thompson & Green Machinery Co., Inc. v. Music City Lumber Co., Inc.

683 S.W.2d 340 (1984)

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Thompson & Green Machinery Co., Inc. v. Music City Lumber Co., Inc.

Tennessee Court of Appeals

683 S.W.2d 340 (1984)

Facts

Joseph Walker (defendant) was president of Music City Lumber Company, Inc. and Music City Sawmill Company, Inc. (collectively, Sawmill). Walker, purportedly on behalf of Sawmill, purchased a large piece of machinery from Thompson & Green Machinery Company, Inc. (Thompson) (plaintiff). On behalf of Sawmill, Walker signed a promissory note to Thompson for the cost of the machinery. However, Sawmill was not incorporated until the day after the purchase. Sawmill later defaulted on the note and returned the equipment to Thompson. Thompson sold the equipment for less than the amount due on the note and sued Sawmill for the balance. Upon learning that Sawmill was not incorporated on the date of the sale, Thompson amended its complaint to include Walker. Walker argued that Thompson was estopped from denying Sawmill’s corporate existence because Thompson dealt with Sawmill as a corporation and did not intend to bind Walker personally to the promissory note. The trial court entered judgment in favor of Walker, and Thompson appealed.

Rule of Law

Issue

Holding and Reasoning (Lewis, J.)

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