First Securities Company v. Dahl

Evelyn Guenther, a 50-percent shareholder, director, and secretary of First Securities Company (plaintiff), signed an affidavit on the company's behalf restricting an easement in order to settle a homeowners' association dispute, doing so while the company president was unavailable and litigation loomed. The affidavit was recorded, and First Securities was aware of it and raised no objection for years, during which other third parties relied on it in purchasing property and setting maintenance assessments. Christine Dahl and the Nakamarus (defendants), who owned neighboring lots, later refused to release the easement restriction when First Securities wanted to sell another lot to developers, prompting First Securities to sue for a declaration that it was not bound by Guenther's affidavit; the trial court refused, and First Securities appealed.