The Law of Promoters; A Treatise on the Law of Promoters of Private Corporations, Covering the Rights and Liabilities of Promoters, and Also the Rights and Liabilities of the Corporation and the Subscribers for and Purchasers of Its Shares, the Rights and Liab (Paperback)

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1916. Excerpt: ... 332. Liability of promoters of defectively organized corporation. Promoters who carry on business in the name of a defectively organized corporation may sometimes be held liable as partners for the debts contracted in the name of the company. The doctrine supported by the weight of authority is that persons who associate themselves to engage in business for profit under any name are liable as partners for the debts incurred in that name; that the limited liability of stockholders of corporations is an exception to the general rule, and that the stockholders come within that exception only if the company in whose name they carry on business is in fact a corporation.61 The associates need New Jersey.--Cottentin v. Meyer, 80 N. J. Law 52, 76 Atl. 341. New York.--Tuccillo v. Pittelli, 127 Supp. 314. Wisconsin Bergeron v. Hobbs, 96 Wis. 641, 71 N. W. 1056, 65 Am. St. Rep. 85. United Kingdom and Colonies Seiffert v. Irving, 15 Ont. Rep. 173; Gildersleeve v. Balfour, 15 Ont. Pr. Rep. 293. And see note to Empire Mills v. Alston Grocery Co., 12 L. R. A. 366. The intended incorporators of an abortive corporation not intended to be formed for profit, were held liable, not as co-partners, but on the theory of agency in Johnson v. Corser, 34 Minn. 355, 25 N. W. 799, and in Upton v. Corser, 34 Minn. 355, 25 N. W. 801. Some authorities seem to sustain a rule that one who has contracted with an abortive company as a corporation, will not, even though no de facto corporation ever existed, be allowed to deny the corporate exnot, to escape liability, prove the existence of a de jure corporation. The creditor cannot, if there is a corporation de facto. call its legal existence into question.62 If there be a law under which the corporation might be organized de jure, a...