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Ewing v. Tondo

A-6333-00T5 (N.J. Super. App. Div. 2002) (Unpublished)

CORPORATION; PERSONAL LIABILITY –- Merely paying rent by use of corporate checks may not be sufficient to show that the obligee was a corporation and not the individual with whom the creditor dealt.

A parcel of commercial property was leased pursuant to an oral agreement. The tenant operated a compacting business until he vacated the premises following his failure to pay several months’ rent. In response to a suit for collection of the unpaid rent, the tenant claimed that he was not personally liable but that the actual tenant was a New Jersey corporation of which he was the sole officer, director, and shareholder. He claimed that he paid the rent with corporate checks except for one occasion when he paid cash. The landlord testified that she believed “she was renting to defendant as an individual and not a corporation.” The testimony was that she was paid in cash on more than one occasion and that the individual tenant “signed printed business checks” in his “individual name without any designation as a corporate officer.” The lower court found that this was an “informal arrangement not evidenced by any paperwork between the parties” and was a “person-to-person arrangement.” It felt that even though the individual tenant may have been incorporated, there was no “reason to believe that he held himself out to be a corporation or that he operated as a corporation. ... He appears to be the only officer of the corporation, there is no resolution or minute [sic] presented to the Court to indicate that he was even empowered to enter into this lease by the corporation if it is indeed a separate entity. He shows checks, I suppose I could have any printer Inc. at the end of my corporate, of my company title, yet he signs not as a corporate officer but as, in his individual capacity.” The Appellate Division found that the lower court’s finding was supported by the record and legally sufficient to support the judgment.

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