For Your Data Hanewald V. Bryan’S Inc. Representative Brief
April 05, 2016
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Hanewald v. Bryan’s Inc. instance brief summary
429 N.W.2d 414 (1988)
PROCEDURAL HISTORY
The case courtroom constitute that the incorporators had non paid the corporation for the shares of stock they received either inwards labor, services, money, or property. However, it held that they were non personally liable for the corporate debt to the creditor because of a loan they made to the corporation for its operating working capital missive of the alphabet was sufficient for those purposes.
DISCUSSION
CONCLUSION
The courtroom reversed alone that role of the judgment which held the incorporators were non personally liable for the corporation's debts inwards favor of the creditor. The courtroom remanded for a judgment holding the incorporators jointly too severally liable for the entire corporate debt to the creditor. Otherwise the courtroom affirmed the judgment.
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429 N.W.2d 414 (1988)
CASE SYNOPSIS
Plaintiff creditor appealed a judgment from the District Court of Stark County, Southwest Judicial District (North Dakota) that held accused incorporators were non personally liable for their corporation's breach of a lease understanding too failure to pay a promissory note, simply which besides held that the corporation was liable to the creditor.PROCEDURAL HISTORY
The case courtroom constitute that the incorporators had non paid the corporation for the shares of stock they received either inwards labor, services, money, or property. However, it held that they were non personally liable for the corporate debt to the creditor because of a loan they made to the corporation for its operating working capital missive of the alphabet was sufficient for those purposes.
DISCUSSION
- The courtroom reversed the judgment inwards favor of the incorporators because they could alone bring been shielded from liability to the extent of their payment for the stock issued to them pursuant to N.D. Cent. Code §10-19-22.
- Because they had non paid for the stock, the incorporators were personally liable for the corporate debt.
- The courtroom rejected the incorporators' claim that the loan for operating working capital missive of the alphabet shielded them from liability.
- The incorporators' loan to the corporation was a debt of the corporation, too when the corporation repaid it earlier it ceased operations that loan could non hold out considered a working capital missive of the alphabet contribution.
CONCLUSION
The courtroom reversed alone that role of the judgment which held the incorporators were non personally liable for the corporation's debts inwards favor of the creditor. The courtroom remanded for a judgment holding the incorporators jointly too severally liable for the entire corporate debt to the creditor. Otherwise the courtroom affirmed the judgment.
Recommended Supplements for Corporations too Business Associations Law