In the Matter of Drive-In Development Corp.
Seventh Circuit Court of Appeals
371 F.2d 215 (1966)
In exchange for a loan, officers of Drive-In Development Corporation (debtor) issued a guaranty of payment to National Boulevard Bank of Chicago (creditor); Chairman Leo Maranz signed the guaranty, and Secretary George Dick — whose duties included recording board resolutions and attesting to guaranties — certified to the bank a supposed board resolution authorizing Maranz to sign it, even though the board never actually passed such a resolution. After Drive-In filed chapter 11, the bank filed a claim on the guaranty; the referee disallowed the claim, finding Maranz lacked authority to bind Drive-In, and the district court affirmed.
Whether statements made by an officer in the course of a corporate transaction, within the scope of the officer's authority, bind the corporation.