After part of the shares of a proposed corporation had been successfully subscribed, one of the promoters hired a carpenter to repair a building that was to be conveyed to the proposed corporation. The promoters subsequently secured subscriptions to the balance of the shares and completed the organization, but the corporation, finding the building to be unsuitable for its purposes, declined to use the building or pay the carpenter. The carpenter brought suit against the corporation and the promoter for the amount the promoter agreed would be paid to him. Who, if anyone, is liable?
After part of the shares of a proposed corporation had been successfully subscribed, one of the promoters hired a carpenter to repair a building that was to be conveyed to the proposed corporation. The promoters subsequently secured subscriptions to the balance of the shares and completed the organization, but the corporation, finding the building to be unsuitable for its purposes, declined to use the building or pay the carpenter. The carpenter brought suit against the corporation and the promoter for the amount the promoter agreed would be paid to him. Who, if anyone, is liable?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter1: Introduction And Goals Of The Firm
Section: Chapter Questions
Problem 1.1CE
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Question
After part of the shares of a proposed corporation had
been successfully subscribed, one of the promoters hired
a carpenter to repair a building that was to be conveyed
to the proposed corporation. The promoters subsequently secured subscriptions to the balance of the
shares and completed the organization, but the corporation, finding the building to be unsuitable for its purposes, declined to use the building or pay the carpenter.
The carpenter brought suit against the corporation and
the promoter for the amount the promoter agreed would
be paid to him. Who, if anyone, is liable?
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