Schaufelberger v. Mister Softee, Inc.
1972 Fla. App. LEXIS 7053, 259 So.2d 175 (1972)
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Rule of Law:
In a conflict of laws situation involving a contract, the substantive law of the jurisdiction where the contract is to be performed governs. When a corporate officer's signature on a guaranty is ambiguous, the law of the place of performance determines whether extrinsic evidence is admissible to prove the signature was made in a representative capacity.
Facts:
- Irving A. Schaufelberger was the president of Hoffman Company, Inc.
- Hoffman Company purchased four ice cream trucks from Mister Softee, Inc.
- As partial payment, Hoffman Company executed a $10,000 promissory note, payable to Mister Softee at its offices in New Jersey.
- Schaufelberger signed the face of the note in a clear representative capacity: 'Hoffman Company, Inc. By: Irving A. Schaufelberger /s/'.
- On the reverse side of the note was a typed guaranty of payment.
- Underneath the guaranty clause, the name 'Hoffman Co., Inc.' was handwritten, followed immediately by the signature 'Irving A. Schaufelberger (L.S.)', which did not specify his corporate title.
- Schaufelberger alleged the ice cream trucks delivered by Mister Softee were defective.
Procedural Posture:
- Mister Softee, Inc. (plaintiff) filed suit against Irving A. Schaufelberger (defendant) in a Florida trial court to enforce a guaranty on a promissory note.
- Schaufelberger raised several affirmative defenses, including that he signed only in his corporate capacity and that there was a failure of consideration.
- On Mister Softee's motion, the trial court struck these two defenses.
- Following a trial, the jury returned a verdict for Mister Softee.
- The trial court entered a final judgment against Schaufelberger.
- Schaufelberger (appellant) appealed the judgment to the District Court of Appeal of Florida, Fourth District, arguing the trial court erred in striking his defenses.
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Issue:
In a suit to enforce a guaranty on a promissory note payable in New Jersey, does New Jersey law apply to determine whether a corporate officer who signed the guaranty without indicating his representative capacity can present evidence that he did not intend to be personally bound?
Opinions:
Majority - Owen, Judge.
Yes. In a conflict of laws situation, the law of the place of performance governs substantive issues, and under New Jersey law, an ambiguous signature on an instrument creates a question of fact allowing for the admission of extrinsic evidence. The note was payable in New Jersey, making it the place of performance. Florida law and New Jersey law are 'diametrically opposed' on the issue of personal liability for ambiguous signatures. While Florida law at the time would impose personal liability as a matter of law, New Jersey law, as established in Norman v. Beling, treats the ambiguity as a question of fact, permitting the signer to introduce evidence that they signed only in a representative capacity. Therefore, the defense that Schaufelberger signed only for the corporation was legally sufficient under the applicable New Jersey law and should not have been stricken. The court also found it was error to strike the defense of failure of consideration, as a guarantor can assert a partial failure of consideration (defective goods) experienced by the principal debtor when both the note and the guaranty are part of the same transaction.
Analysis:
This case serves as a straightforward application of the choice-of-law principle of 'lex loci solutionis' (the law of the place of performance) in contract law. It highlights how the outcome of a case can hinge entirely on which state's law applies, as Florida and New Jersey had reached opposite conclusions on the same legal question regarding agent liability on a negotiable instrument. The decision reinforces that a guarantor can generally raise the same defenses as the principal debtor, such as failure of consideration, when the guaranty is executed contemporaneously with the principal obligation. The opinion also notes in passing the modern trend, reflected in the UCC, to allow parol evidence between immediate parties to resolve signature ambiguities, aligning with the New Jersey rule.
