General Overseas Film Ltd. v. Robin International, Inc.

542 F.Supp. 684 (1982)

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Nature of the Case

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Facts

General (P) claims that Anaconda promised through its vice president, Kraft, to guarantee repayment of loans made by P to Robin (D). P also claims that Anaconda, through Kraft guaranteed D's obligations and liabilities in connection with related transactions. The transactions began when Reisini approached Haggiag for a loan of $500,000 to D, a company that Reisini owned and controlled. Haggiag was empowered by P to make the commitment. Reisini told Haggiag that he was building the Soviet Union's United Nations Mission in Riverdale, New York. Reisini told Haggiag that there were claims of $1,000,000 against the project but that they would probably settle for half that amount. Haggiag agreed to lend the money. In November 1976 Haggiag asked Reisini about repayment, and Reisini asked for an extension if Reisini could provide a guarantee from a large public company. Reisini introduced Haggiag to Kraft and Kraft told Haggiag that Anaconda would guarantee D's debt up to $1,000,000. Reisini agreed to give P a $1,000,000 note and Kraft agreed to provide Anaconda's guarantee for the same amount. Haggiag met with the parties and got the note and guarantee on December 13, 1976, with a due date of September 13, 1977. Shortly before the due date, Reisini told P that he did not have the cash to pay the note. Haggiag agreed to extend the due date and exchanged the $1,000,000 note for $800,000. Haggiag got another guarantee from Anaconda through Kraft. Another due date passed, and another extension was asked for this time with the note being split in $500,000 and $300,000 increments. Reisini paid Haggiag $500,000 satisfying the first note. Before the $300,000 note was due, Reisini asked for another extension and Haggiag agreed to accept a demand note for the $300,000 and then learned that Reisini and Kraft had been implicated in a number of fraudulent transactions. Haggiag demanded payment. It was not forthcoming, and P had to exercise the guarantee against Anaconda. Anaconda defended on the grounds that Kraft lacked actual or apparent authority to engage in the transaction. P conceded at trial that Kraft had not actual authority but claimed that there was apparent authority.