## Facts

- Action Leasing Corporation (ALCO) sought to enforce equipment lease agreements purportedly executed on behalf of Ideal Foods, Inc. (Ideal).
- Richard Maru, Ideal’s secretary-treasurer and a minority shareholder, signed the lease agreements in Ideal’s name.
- For approximately six months before signing the leases, Maru worked solely at Ideal’s subsidiary rather than in Ideal’s day-to-day operations.
- ALCO’s representative knew that Maru no longer ran Ideal at the time the leases were signed.
- Ideal disputed Maru’s authority to bind the corporation and defended on lack of inherent (by office) authority and lack of apparent authority.
- The trial court entered judgment for ALCO; Ideal appealed.

## Issues

1. Whether a corporate secretary-treasurer and minority shareholder has inherent authority, solely by virtue of office or share ownership, to bind the corporation to lease contracts.
2. Whether the corporation is bound under apparent authority where the third party knew the officer no longer managed the corporation and there was no showing of a principal’s representation of authority.

## Decision

- The appellate court reversed the judgment for ALCO.
- The court held Maru lacked inherent authority to bind Ideal to the leases based only on his corporate offices or minority share ownership.
- The court held ALCO failed to prove apparent authority because the required elements were not supported by the evidence, including given ALCO’s knowledge that Maru no longer ran Ideal.

## Legal Principles

- A corporate secretary, merely as such, is a ministerial officer and does not have inherent authority to transact corporate business or bind the corporation absent authorization.
- A corporate treasurer lacks authority to bind the corporation in dealings with third parties unless expressly or impliedly authorized.
- Apparent authority is an estoppel doctrine requiring: (1) a representation by the principal, (2) reliance by a third party on that representation, and (3) a change of position by the third party in reliance.
- Apparent authority is not established where the third party knows facts indicating the purported agent lacks managerial control or authority and cannot reasonably rely on the agent’s claimed power absent a principal’s contrary representation.

## Conclusion

The court reversed because the officer who signed the leases lacked both inherent authority based on his offices and apparent authority, where ALCO knew he no longer managed the corporation and did not prove any principal representation that would justify reliance.


Ideal Foods, Inc. v. Action Leasing Corp., 413 So. 2d 416 (Fla. Dist. Ct. App. 5th Dist. 1982)