1. WHAT IF THE FACTS WERE DIFFERENT? Suppose that the name Pyramid Title, LLC, had not been included on the...
1. WHAT IF THE FACTS WERE DIFFERENT? Suppose that the name Pyramid Title, LLC, had not been included on the face of the check. Would Peoples have been personally liable for payment of the check in that situation? Why or why not?
2. THE ECONOMIC DIMENSION Should Encore Credit Corporation’s failure to “timely fund” the $26,000 loan be taken into consideration by the court when determining whether Peoples could be held personally liable on the check to the Jeanmaries? Discuss fully.
On August 26, 2005, Anthony and Alcibia Jeanmarie sold property located in New Orleans to Melanie Murray. As part of the transaction, Encore Credit Corporation provided two loans to Murray, for $104,000 and $26,000. Murray secured each loan with a mortgage (mortgages will be discussed in Chapter 31) in favor of Encore. Mark Peoples, through his company, Pyramid Title, LLC, handled the closing of the sale. At the closing, a check was drawn on the Pyramid escrow account in the sum of $110,303.86, payable to the Jeanmaries. The Jeanmaries deposited the check in their account, but two days later the check was returned because there were insufficient funds in Pyramid’s escrow account to cover the check. Peoples stated that one of the reasons for the shortage of funds in the escrow account was that Encore Credit had not “timely funded” the $26,000 loan, which would normally be in the account. The Jeanmaries filed an action in a Louisiana state court, seeking payment from Pyramid Title, LLC, and Peoples personally. Peoples contended that he should not be held liable because he had signed the Pyramid check to the Jeanmaries in his representative capacity. The trial court held for the Jeanmaries, and Peoples and Pyramid submitted a motion for a new trial. When the trial court denied that motion, Peoples and Pyramid appealed.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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