Court Opinion

ID: 8041517
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:35:22.694657+00
Date Added: 2024-06-11T16:37:20.011266
License: Public Domain

Shanahan, J.,
dissenting.
Although I agree with the general proposition of law that a corporate officer, as a signatory for a check drawn on the corporation’s account, may, under certain circumstances, be a “customer” within Neb. U.C.C. § 4-402 (Reissue 1980) for the purpose of a depository bank’s liability for wrongful dishonor of the corporation’s check, the facts alleged by Parrett fail to provide the circumstances necessary for application of that general proposition of law.
The allegations of Parrett’s amended petition supply the following facts: Parrett was' an authorized signatory on the checking account of P & P Machinery; there was a history of credit transactions between P & P Machinery and the bank; Parrett had given the bank his personal guaranty for obligations of P & P Machinery; and Parrett was a corporate officer and the principal shareholder of P & P Machinery.
What is not supplied in Parrett’s petition, and cannot be reasonably inferred from the allegations, are those facts which permit application of the general proposition of law regarding a corporate officer as a “customer” of a bank in reference to the bank’s wrongful dishonor of a corporate check signed by the officer.
Although Kendall Yacht Corp. v. United California Bank, 50 Cal. App. 3d 949, 123 Cal. Rptr. 848 (1975), seems to be the basis for determining whether Parrett was the bank’s customer, the salient facts found in Kendall are absent from Parrett’s case. The checking account stood in the name of P & P Machinery, an existing corporation with a long history of credit transactions with the bank. However, in those transactions nothing indicates that the bank ever disregarded the corporate existence of P & P Machinery and treated Parrett as the principal or otherwise identified Parrett as the individual responsible for satisfaction of the corporation’s obligations to the bank. Actually, the facts alleged and inferences therefrom are to the contrary. Although Parrett gave his guaranty for P & P Machinery’s obligations to the bank, on no occasion did the bank enforce, or threaten to *155enforce, Parrett’s guaranty. Mere existence of the guaranty is neutral in Parrett’s case. Moreover, Parrett did not, either voluntarily or in response to the bank’s request or demand, use his funds or property to pay P & P Machinery’s indebtedness to the bank. Regarding P & P Machinery, there is no allegation or justifiable inference that the corporation was “under-capitalized,” a “transparent shell” as a corporation in name only without the issuance of stock, or lacked “viability as a separate and distinct legal entity.” Kendall, supra. None of those Kendall conditions exist in Parrett’s situation. Hence, there is no basis to conclude that Parrett was the bank’s customer at the time the check was dishonored. The district court was correct in sustaining the bank’s demurrer and dismissing Parrett’s action.
Since Parrett was not the bank’s customer in the subject transaction, there is no need to consider the question about special duty in relation to a shareholder’s cause of action. Consequently, the judgment of the district court should have been affirmed.