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Empire Manufacturing V Stuart

Empire Manufacturing Company was sued on a promissory note it had issued in its corporate name. Empire Manufacturing claimed it was not properly organized under state law at the time. However, the court ruled Empire Manufacturing could be held liable because it had attempted to organize in good faith and its business of manufacturing was authorized under state law. Even though Empire Manufacturing had dissolved, it could still be pursued for payment within the three years allowed by state statute for winding up corporate affairs.

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351 views1 page

Empire Manufacturing V Stuart

Empire Manufacturing Company was sued on a promissory note it had issued in its corporate name. Empire Manufacturing claimed it was not properly organized under state law at the time. However, the court ruled Empire Manufacturing could be held liable because it had attempted to organize in good faith and its business of manufacturing was authorized under state law. Even though Empire Manufacturing had dissolved, it could still be pursued for payment within the three years allowed by state statute for winding up corporate affairs.

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Zox
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Empire Manufacturing Company of Grand Rapids v Stuart

46 Mich. 482; 1881; Martson, CJ.


Digest by Efren

Facts:
1. Empire Manufacturing was sued upon a promissory note given by it in its corporate name.
a. Empire’s defense was that by mistake, at the time the note was given, the company was not properly
organized under any law of the State. Afterwards, upon ascertaining such fact, the corporation was
dissolved and formed under a different name

Issue/Ratio:
W/N Empire Manufacturing could be held Liable – Yes.
 The Corp. was one that could have been legally organized under laws existing at the time of its formation.
o Its business of manufacturing was authorized. Having attempted to organize in good faith, and in the due
course of its business giving paper in its corporate name, it could not later repudiate the transaction or
evade responsibility thereon.
 The dissolution would not deprive the creditors of still looking to the old organization for payment. The state’s
statute allows three years for winding up of affairs.

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