John Goodman worked hard, started and now owns a successful landscaping business

Question

John Goodman worked hard, started and now owns a successful landscaping business. He has an operating line of credit at Bank One, a company credit card and a line of credit at the local Feed and Seed Company where he buys his supplies and equipment. He and his wife have several personal credit cards which John pays off every month-

Two years ago he brought in a new employee, “Sleaze”. Over time, he has allowed Sleaze to occasionally make bank deposits and get a company checks cashed at Bank One. He takes Sleaze to the Feed and Seed with him every week and Sleaze has picked up supplies for the Company and charged John’s account at least once or twice a month.

One day, John went home for lunch and found Sleaze making out with John’s pregnant wife, Hussy—Sleaze and Hussy admitted to having an affair and told John that Sleaze was the baby’s father. John was so devastated that he spent several days at his sister’s getting over the shock- When he went home, Hussy moved out and John dropped Hussy and Sleaze from his company health insurance policy--

Over the next week John discovered the following: Sleaze had used up the company line of credit at Bank One by forging a company check – ($30,000) Sleaze maxxed out the company credit cards by buying one way airline tickets, new clothes , jewelry, etc.. Sleaze went to the Feed and Seed and charged $50,000 worth of lawn equipment which he then sold on the black market -- Hussy had been busy also—She maxxed out all of the joint personal credit cards to the tune of $60,000.

In addition, all of the excitement caused Hussy to go into preterm labor and have the baby six weeks early. Since Hussy is no longer on the insurance plan, the bill is $40,000— Sooo—John has now come to you for advice about his situation-- Using the agency principles in this week’s materials, answer and explain your answers to the following—

1. Is John liable for the Bank One overdraft?

2. Is John liable for the debt to Feed and Seed?

3. Is John liable for the business credit card debt?

4. Is John liable for the credit card debt Hussy racked up?

5. Is John liable for Hussy’s hospital bill? Short of violence, what recourse, if any, does John have?

Explanation / Answer

1. an agent is the person who should carry business activities for the welbeing of his principal and not for self benefits. but in this case John is the responsible for the actions done by Sleaze.

2. no, Sleaze only liable to the debt of Feed and seed. when John put a file against Sleaze they will investigate what happens exactly and they put all the facts and arrest Sleaze only

3. the credit cards issued on the name of John only, but they were used by Sleaze, so he can inform the same to his lawyers and provide the proofs for it.

4. john is the responsible person to the debt also.

5. no, John is not liable to the hospital bill. being the baby is the feed of Sleaze, he is only liable.

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