Benjamin Plumbing, Inc. v. Barnes, 47 N.W.2d 888 (Wis. 1991)

Facts

Whitcomb contacted Benjamin about doing plumbing work.  In the first letter requesting a bid, Whitcomb’s signature acknowledged “For Response to Hunger Network” but was on Church World Service letterhead.  In the letter accepting the bid, Whitcomb’s signature acknowledged “Canning Committee-RHN” and was on Response to Hunger Network letterhead.  Whitcomb only paid half the bill.

Procedural History

Benjamin sued for the balance and in Whitcomb’s answer it was affirmatively asserted that “Response to Hunger Network, Inc. is a Wisconsin corporation.”

Issue(s)

Is an agent personally liable on a contract where the other party did not have notice of the corporate status of the principal at the time of contracting?

Holding(s)

Yes.

Reasoning/Analysis

The Court found that a corporation enters into contracts and incurs liability as a separate legal entity.  It is the agent who seeks to escape liability who has the burden of proving that the principal’s corporate status was disclosed.  There was no express disclosure of corporate status.  Benjamin had no affirmative duty to investigate.  The fact that RHN was a charitable organization does not lead to the inference that it was a corporation.  Whitcomb is liable because he is the contracting party.

Judgment/Outcome

The Court affirmed the judgment of the lower court.