No. 86-91 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

MAYER BROS., a Washington 

Corporation, 

Plaintiff and Respondent, 

DANIEL RICHARD JEWELERS, INC., 

DANIEL McCLOY and RICHARD EMBRY, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable Thomas Olson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Morrow, Sedivy & Bennett; Edmund P. Sedivy, Jr., 

Bozeman, Montana 

For Respondent: 

Moore, Rice, OIConnell & Refling; Christopher L. 

Manos, Bozeman, Montana 

Submitted on Briefs: August 21, 1986 

Decided: October 9, 1986 

fib 

Clerk 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

Defendants appeal the summary judgment against them 

granted in the District Court, Eighteenth Judicial District, 

Gallatin County. Defendants contend a genuine issue of 

material fact exists regarding the personal liability of the 

defendants for debts incurred on behalf of the corporation, 

Daniel Richard Jewelers, Inc. 

On March 10, 1982, Dan McCloy and Dick Embry filled out 

a commercial credit application for the purpose of obtaining 

merchandise from Mayer Bros., a wholesale jewelers. The 

merchandise was to be on account for Daniel Richard Jewelers, 

which defendants indicated was owned as a corporation. At 

the bottom of the one-page typewritten application was the 

following paragraph: 

If credit is granted, the undersigned agrees to pay 

for all merchandise purchased. If the applicant is 

-- now or later becomes a corporation, the undersignz 

agrees -- to be personaily liable for payment -- of all 

purchases. (Emphasis supplied. ) 

Defendants placed their signature below this paragraph. 

On January 1, 1984, defendants executed four promissory 

notes, two for $11,500 and two for $15,000. The notes were 

signed "Daniel Richard Jewelers of Helena" or "Daniel Richard 

Jewelers, Inc." and were also signed by McCloy and Embry 

personally, without language showing they were signing as 

officers or agents of the corporation. A total of three 

payments have been made on the various notes, leaving a 

balance of $9,700.38, $10,605.78 and $30,000 owing. In May, 

1984, Mayer Bros. filed a complaint against defendants for 

default on various payments due. In July, 1984, Mayer Bros. 

filed an amended complaint adding a count alleging defendants 
owed Mayer Bros. $30,000 on an open account. In response to 

Mayer Bros.' request for admissions, defendants admitted 

corporate liability on the notes, but denied personal 

liability. 

Mayer Bros. moved for a summary judgment on the 

pleadings, pursuant to Rule 56 of M.R.Civ.P., which was 

granted in June, 1985. The District Court found there was no 

genuine issue of material fact and ordered defendants to pay 

the amounts due. With respect to the personal liability of 

defendants McCloy and Ernbry, the court found each personally 

liable since each admitted signing the commercial credit 

application which provided for personal liability on payment 

for all purchases. 

In reviewing an order for summary judgment, the standard 

of review for the appellate court is the same as that used by 

the trial court under Rule 56, M.R.Civ.P. Kronen v. Richter 

(Mont. 1984), 683 P.2d 1315, 1317, 41 St.Rep. 1312, 1314. 

Thus, we may find summary judgment proper when "the 

pleadings, depositions, answers to interrogatories, and 

admissions on file, together with the affidavits, if any, 

show that there is no genuine issue as to any material fact 

and that the moving party is entitled to a judgment as a 

matter of law." Rule 56 (c) , M.R.Civ.P. 

The initial burden is on Mayer Bros., as the moving 

party, to establish that the evidence raises no genuine 

issue of material fact. Morales v. Tuomi (Mont. 19851, 693 

P.2d 532, 535, 42 St.Rep. 60, 62. In this instance, Mayer 

Bros. has alleged in its complaint and amended complaint that 

defendants breached their agreement to complete payment as 

schedul-ed on their promissory notes. Mayer Bros. attached 

copies of the commercial credit 
application agreement and the promissory notes to the 

complaints. The credit application clearly stated that 

defendants would be personally liable for merchandise 

purchased on behalf of the corporation. Thus the record 

reflects defendants, both personally and as a corporation, 

agreed to pay for the merchandise and assume the debts of the 

corporation. 

Once the record discloses no genuine issue of material 

fact, the burden of proof shifts to the party opposing the 

motion for summary judgment to show by present facts of a 

substantial nature that a material fact issue does exist. 

Farmers Ins. Exchange v. Christenson (Mont. 1985) , 697 P. 2d 

460, 462, 42 St.Rep. 337, 339; National Gypsum Co. v. Johnson 

(1979), 182 Mont. 209, 212, 595 P.2d 1188, 1189. Mere 

conclusory or speculative statements are insufficient to 

raise a genuine issue of material fact. National Gypsum - Co. 

at 212, 595 P.2d at 1189. The opposing party "may not rest 

upon the mere allegations or denials of his pleading, but his 

response, by affidavits or as otherwise provided in this 

rule, -- must set forth specific facts showing there - is - a 

genuine issue for trial. " (Emphasis added.) Rule 56 (el , 

With this standard in mind, we turn to the record. 

There are two instances in the record where defendants 

address the issue of their personal liability. The first 

instance is the following exchange in the Requests for 

Admission: 

Admission No. 6: Admit that Exhibit 'A' provides 

that 'if the applicant is now or later becomes a 

corporation, the undersigned agree to be personally 

liable for payment of all purchases.' 

Response to Admission No. 6: Denied. 
The second instance is in defendants' brief in 

opposition to the motion for summary judgment. Defendants 

state: 

[Tlhere are issues of fact remaining for 

determination by this Court, including: 

(1) Are Richard Embry and Daniel McCloy 

individually responsible and liable for the two 

Promissory Notes executed in favor of the Plaintiff 

by Daniel Richards Jewelers, Inc.; 

(2) Are Richard Embry and Daniel McCloy 

individually liable for either of the two 

Promissory Notes executed in favor of the Plaintiff 

Daniel Richard Jewelers of Helena; 

(3) Is Daniel Richard Jewelers, Inc., liable for 

either of the Promissory Notes executed in favor of 

the Plaintiff by Daniel Richard Jewelers of Helena. 

Defendants' brief goes on to argue that the admission of 

corporate liability does not establish "Richard Embry's 

personal liability . . . [or] . . . Daniel McCloy's liability 

with respect to the Promissory Notes executed by Daniel 

Richard Jewelers, Inc. or Daniel Richard Jewelers of 

Helena.. . ." This is the extent of defendants' evidence of 

a material, factual issue for trial. Defendants offer no 

affidavits or testimony in support of their argument for no 

personal liability. In their brief on appeal, defendants 

argue that if the case is remanded for trial, they will 

testify that their intent at the time of signing the credit 

application was to be liable in a corporate capacity only. 

However, defendants present no evidence of a contrary intent 

except for this conclusory statement in their brief. 

We have recently held that a party opposing a motion for 

summary judgment may not rest upon the mere allegations of 

the pleadings, but has an affirmative duty to respond by 

affidavits or sworn testimony with specific facts that show 

there is a genuine issue of fact for trial. B.M. By Berger 
v. State (Mont. 1985), 698 P.2d 399, 401, 42 St.Rep. 272, 

274-75; Rule 56(e), J9.R.Civ.P. Without such specific factual 

evidence, we are unable to determine that any real factual 

controversy exists. Accordingly, we find the record 

indicates Mayer Bros. is owed the accrued sums plus interest, 

and defendants Ernbry and McCloy are liable on the debts in 

their personal capacities. 

The judgment of the District Court is affirmed. 

Justice 

We Concur: