Opinion
October 2, 2007.
David I. Tenzer, Esq. Glenn, Feldman, Darby Goodlatte.
Andrew P. Pearson Petty, Livingston, Dawson Richards.
Dear Counsel:
Plaintiff corporate landlord is the assignee of the original landlord. Defendant corporation is the original tenant. Defendant Reilly, who is sued in his individual capacity and who is alleged to be a guarantor of the lease, is the president of the tenant corporation. A Guaranty of Lease between landlord and tenant was entered into and signed "BY: Edward E. Reilly" (and on the next line below the signature appears) "TITLE: President". Nowhere on the guaranty does it indicate what entity Reilly might be president of. The body of the guaranty does not name the guarantor but does name the landlord and tenant.
Defendant Reilly has demurred to landlord's complaint alleging that he signed as guarantor in his representative capacity as president of tenant corporation, not as an individual. Plaintiff claims that it would not make sense for the tenant named in the lease, who was already bound by the terms of the lease, to sign the guaranty as guarantor. Instead, he argues, it was the intent of the parties for Defendant Reilly to sign as an individual guarantor.
Defendant's demurrer asks the Court to find that Defendant Reilly signed the guaranty as a corporate representative, and not as an individual. "A demurrer, unlike a motion for summary judgment, does not allow the court to evaluate and decide the merits of a claim; it only tests the sufficiency of factual allegations to determine whether the motion for judgment states a cause of action." Fun v. VMI, 245 Va. 249(1993). Plaintiff's complaint clearly states a cause of action when it alleges that Defendant Reilly signed as a guarantor.
In the alternative, if Defendant Reilly simply signed as an agent for an undisclosed principal, as shown by the guaranty attached as an exhibit to the pleading, the logic of Waddill v. Sebree, 88 Va. 1012, 1015 (1892) would seem to apply. There the Court found that where credit was given to the agent with knowledge that he was acting on the behalf of an undisclosed principal, the agent became personally liable. The question of the intent of the parties and disclosure of the principal is a jury question that would only serve the purpose of making the undisclosed principal equally liable with the agent. The demurrer will be denied.
Counsel for Plaintiff should prepare an appropriate order, incorporating this letter opinion by reference, and present the same for entry after having obtained endorsement of counsel.