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Builders Vs Dunn
Builders Vs Dunn
Samuels preferred to organize the corporation and then make the ISSUE
contract for the machinery. Gaston wished him to order the
machinery then, and go ahead with the corporation afterwards. WON the corporation may sue upon a contract made on its behalf by one of
the promoters before incorporation? YES.
On September 8, 1982, the National Federation of Labor Union
HELD
(NAFLU) filed a request for conciliation before the Bureau of
Labor Relations.
The Supreme Court ruled in favor of Builders Duntile Co.
After talking it over with the other promoters who were in the city,
In this case it was clearly understood between Samuels and the
Samuels signed a contract, in the usual form, ordering the
other promoters and Gaston, the agent of the manufacturer, that the
machinery on April 23. The contract contained this provision: "W
contract was made on behalf of the corporation which they
E. Dunn. Manufacturing Company agrees to furnish, free of
proposed to form, and when the corporation was formed the
charge, an experienced service man for a period of five days to
incorporators took over the whole thing, and ratified all that had
insure proper installation and instruct your force." The order,
been done on its behalf.
signed by Samuels, was accepted by the company. The machinery
was shipped and reached Paducah on June 6.
To deny the corporation the right to sue for damages for the benefit of the corporation to be organized. He was one of the
breach of contract and the loss it sustained by reason of the promoters, and had no intention of buying the machinery for
first agent's negligence and improper acts would be to deny it himself. The other promoters, knowing all the facts, recognized
all remedy for the breach of the contract, for Samuels did not this, and so the corporation, when organized, at once took charge
make the contract for himself, and he personally did not of the plant which had been bought for it, and gave Samuels stock
sustain the damages. to the amount of his expenditures.