Friday, November 22, 2013

Robertson v. Levy case brief

Robertson v. Levy case brief summary
197 A.2d 443 (1964)


CASE SYNOPSIS
Appellant seller brought suit against appellee association, which was doing business as a corporation, for damages incurred when the association defaulted under a note and lease assignment. The seller appealed a judgment of a trial court (District of Columbia), which held that the association was not personally liable under D.C. Code § 29-950 because the seller accepted a payment after a certificate of incorporation was issued.

CASE FACTS
A seller transferred the assets of a business and assigned a lease to an association that had submitted articles of incorporation and was doing business in a corporate name. After the transfer and assignment were completed a certificate of incorporation was issued and one payment was made on the installment note for the assets. When the association ceased doing business the seller brought suit for the balance of the note and the damages incurred in settling the lease. The trial court ruled that the seller was estopped from denying the existence of a corporation, and he appealed claiming that under § 29-950 the association was liable because it acted as a corporation without authority.

DISCUSSION

  • The court held that D.C. Code Ann. § 29-921c, which stated that a certificate of incorporation was conclusive evidence of corporate existence, together with § 29-950, had eliminated the concept of corporations by estoppel and it was immaterial that the seller believed he was dealing with a corporation. 
  • The association's subsequent incorporation had not relieved it of personal liability under § 29-950 for unauthorized corporate activity and the seller was entitled to judgment.

CONCLUSION
The court reversed the judgment with instructions to enter judgment against the association.

Recommended Supplements for Corporations and Business Associations Law

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