Southern-Gulf Marine Co. No. 9, Inc. v. Camcraft, Inc. case brief

Southern-Gulf Marine Co. No. 9, Inc. v. Camcraft, Inc. case brief summary
410 So.2d 1181 (1982)

CASE SYNOPSIS

Plaintiff buyer appealed a judgment from the Sixteenth Judicial District Court for the Parish of St. Martin (Louisiana), which sustained the exception of no cause of action filed by defendant seller in the buyer's breach of contract action.

CASE FACTS
The buyer contracted with the seller for the purchase and sale of a supply ship which the seller was to construct. The contract indicated that the buyer was an extant Texas corporation, when in fact it had yet to be organized under the laws of any state. Subsequently the seller was informed that the buyer had been incorporated under the laws of the Cayman Islands. Still later, probably because of appreciation in the price the vessel might fetch, the seller balked at delivering it to the buyer.

DISCUSSION

• In reversing the judgment, the court held that the trial court committed legal error in holding that the buyer's lack of legal status at the time of contracting was an impediment to its maintenance of this action. 
• The court held that absent some prejudice to its substantial rights, the seller was estopped to escape performance by raising the issue of the buyer's prior lack of de jure status. 
• The court noted that both parties relied on the contract, and that the contract was fully enforceable against the buyer, notwithstanding that it was only a de facto corporation when it entered into the contract.

CONCLUSION
The court reversed the judgment that dismissed the buyer's breach of contract action, and remanded the cause for further proceedings.


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