Case Brief
HELMER et al. v. RUMARSON TECHNOLOGIES, INC. (two cases)
Court of Appeals of Georgia, 2000.
245 Ga. App. 598,
538 S.E.2d 504
FACTS Rumarson Technologies, Inc. (RTI) sued Robert and Percy Helmer to collect from them personally $24,965 owed to it by Event Marketing, Inc. (EMI) when EMI's check to pay RTI bounced. Robert and Percy Helmer were authorized signatories on EMI's corporate account, and they signed the check. RTI argued that as signatories they could be held personally liable. The lower court agreed and ruled in favor of RTI holding the Helmers liable. The Helmers appealed. Also of note, is that check was dated 1998 although there is some non-material dispute as to whether it was August 14, 1998, or on or around July 13, 1998.
ISSUE Can an authorized signatory on a corporate account be held personally liable for corporate checks returned for insufficient funds?
DECISION No. The court reversed the decision of the trial court holding that the Helmers are not liable to RTI as signatories of EMI's account.
REASON The court recognized its decision in Peterson v. Holtrachem, Inc., as controlling, and as the decision in Peterson is contrary to the trial court's decision, they reversed the decision of the trial court.
The court reasoned that OCGA ß 11-3-403 is the applicable statue in this case, but there are different versions of OCGA ß 11-3-403. The 1995 version was interpreted in Kolodkin v. Cohen where the court found that an individual signing a check drawn on a business account could be personally liable if the check was not honored by the bank. The 1996 version [OCGA ß 11-3-402(c)] was interpreted by Peterson where the court held that an individual signing a check drawn on a business account is not personally liable if the check is not honored by the bank.
The court further reasoned that even though Peterson was written after the trial court made its decision, it is still controlling for 2 reasons. First, as the check at issue was signed in
Court of Appeals of Georgia, 2000.
245 Ga. App. 598,
538 S.E.2d 504
FACTS Rumarson Technologies, Inc. (RTI) sued Robert and Percy Helmer to collect from them personally $24,965 owed to it by Event Marketing, Inc. (EMI) when EMI's check to pay RTI bounced. Robert and Percy Helmer were authorized signatories on EMI's corporate account, and they signed the check. RTI argued that as signatories they could be held personally liable. The lower court agreed and ruled in favor of RTI holding the Helmers liable. The Helmers appealed. Also of note, is that check was dated 1998 although there is some non-material dispute as to whether it was August 14, 1998, or on or around July 13, 1998.
ISSUE Can an authorized signatory on a corporate account be held personally liable for corporate checks returned for insufficient funds?
DECISION No. The court reversed the decision of the trial court holding that the Helmers are not liable to RTI as signatories of EMI's account.
REASON The court recognized its decision in Peterson v. Holtrachem, Inc., as controlling, and as the decision in Peterson is contrary to the trial court's decision, they reversed the decision of the trial court.
The court reasoned that OCGA ß 11-3-403 is the applicable statue in this case, but there are different versions of OCGA ß 11-3-403. The 1995 version was interpreted in Kolodkin v. Cohen where the court found that an individual signing a check drawn on a business account could be personally liable if the check was not honored by the bank. The 1996 version [OCGA ß 11-3-402(c)] was interpreted by Peterson where the court held that an individual signing a check drawn on a business account is not personally liable if the check is not honored by the bank.
The court further reasoned that even though Peterson was written after the trial court made its decision, it is still controlling for 2 reasons. First, as the check at issue was signed in