Please post your case review in the IRAC structure here. 250 word minimum. HATHA

Question

Please post your case review in the IRAC structure here. 250 word minimum.

HATHAWAY, Judge. This is an appeal from a judgment in favor of appellee, plaintiff in a breach [15 Ariz. App. 100] of contract action, against appellant, one of the defendants below.1 (Links to an external site.)Links to an external site. The case was tried to the court sitting without a jury and, although a counterclaim remains unadjudicated, the judgment has the requisite "determination and direction" to render it appealable. Arizona Rules of Civil Procedure 54(b), as amended, (Supp. 1970-71), 16 A.R.S. The trial court made findings of fact and conclusions of law. It found that prior to January 1, 1966, the plaintiff was the owner of an employment agency business in Maricopa County; that he sold said business to the defendant William Spence on January 1, 1966; that the contract of sale provided that the said defendant would pay to the plaintiff the sum of $5,000 together with interest thereon from January 1, 1966 and that this sum was to have been fully paid during 1966; that Spence had not paid said sum and that it was then due and payable; and that Spence had also, as part of the contract of sale, agreed to pay certain creditors and had failed to do so thereby requiring the plaintiff to pay to four creditors a total sum of $1,446.98. The court concluded that the plaintiff was entitled to recover the sum of $5,000 with interest thereon at 8% per annum from January 1, 1966, until paid, and the additional sum of $1,446.98 with interest thereon from the date of judgment. On appeal, no question is raised as to the amount of the award. Appellant's only contention is that the trial court erred in finding him personally liable. It is the position of appellant that the parties to the agreement for sale intended that he would not be liable for its performance, but rather that a contemplated corporation which had not been organized at the time the agreement was entered into would be liable. The evidence is undisputed that, at the time of the subject agreement, the corporation (the defendant which obtained a judgment of dismissal below) was not organized, but was subsequently formed. The general rule is that where a corporation is contemplated but has not been organized at the time when a promoter makes a contract for the benefit of the corporation, he is personally liable on it, or incurs a personal liability with respect to the transaction in the absence of contrary agreement with the other contracting party. See Annot., 41 A.L.R.2d 477, § 2 (1955) and cases cited therein. The promoter is likewise personally liable on or with respect to such transaction, in the absence of an express agreement otherwise, when he executes a contract in the name of the proposed corporation. Annot., 41 A.L.R.2d 477, § 3 (1955). In the case sub judice, the evidence is conflicting as to the parties' intention to relieve the appellant of personal liability. The trial judge, as the trier of fact, resolved the conflict in favor of the appellee, i.e., that there was no intention to relieve appellant of personal liability. There being sufficient evidentiary support for the trial court's finding that appellee sold his business to appellant, we accept such finding on appeal. In re Griswold's Estate, 13 Ariz.App. 218 (Links to an external site.)Links to an external site., 475 P.2d 508 (Links to an external site.)Links to an external site. (1970).2 (Links to an external site.)Links to an external site.

Explanation / Answer

The facts of the case that-

1.That prior to Jan1,1966,the plaintiff was the owner of an employment agency business in Maricopa county.

2.Plaintiff has sold the business to the defendant william Spence on Jan1,1966.

3.Deal of contarct between defendant and plaintiff was settled for a sum of 5500 dollar and with the interest from Jan1,1966 and total sum has to be paid in 1966 .

4.William Spence,defendant ,has not paid the agreed sum 5500 dollar to the plaintiff and neither he has paid any some to its creditors as agreed at the time of agreement.

5.The plaintiff paid to its creditors a sum of 1446.98 dollar as a default from defendant.

Juridictional proceedings-

1. The defendant is personally liable to pay a sum of 5500 dollar with the rate of interst of 8% from Jan 1,1966 until paid and he is also liable to pay a sum of 1446.98 dollar with interst thereon from the date of judgement.

2. On apeal no question has been raised to the amount of award because as per appellant view,the court has not made defendant personally liable for the act.

3.The view of appellant was based on the contemplated corporation position which had not been organised at the time of agreement,as shown the subject matter of agreement.

Rule of law-

The corporation rules says that where a corporation is contemplated but has not been organised at the time when a promotor initiate an agreement for the contract for its benefits, he is personally liable on its act for the benefit of the corporation, whatever may be the transaction in the absence of contrary agreement with other opposite party.

Judgement- Though judgement is supported with evedence and in the facts of cases the evidence is conflicting to the party,s intention to relieve the applellant from personal liability.

But the trial judge has resolved the case in favor of appellee and held that appellant is responsible for personal liability on the basis of finding on appeal.

Review conclusion-This case highlight the intention of the promotor of corporation who indulge in various agreements and finally the burdon of non performance passed it on contracting parties.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.