Law Commons^™

Principal And Surety - Fidelity Bonds - Effect Of Failure To Make Disclosures Regarding Bonded Employees, Francis T. Goheen

Michigan Law Review

The defense on a fidelity bond given by the cashier was the failure of the officers of the obligee bank to disclose that prior to the execution of the bond the bank examiner had discovered and advised the officers that the cashier had, without the knowledge and consent of the officers and directors, become indebted to the bank in the. sum of $889.60 by paying his own checks drawn on the bank. When the overdraft was called to his attention the cashier immediately repaid the bank. The surety insisted that despite the fact that the officers of the bank may …

Election Of Remedies - As Between Conversion And Replevin - Measure Of Recovery

Michigan Law Review

Through fraud, defendant received from plaintiff certain shares of stock together with other securities to secure a loan of $300,000 to the plaintiff. Defendant wrongfully hypothecated this stock. Plaintiff, after learning of the conversion, sued for the specific stock in replevin. During the course of the action he changed his demand to one in damages for conversion. The court held that plaintiff may not change the theory of his cause of action from replevin to conversion. Satterwhite v. Harriman Nat. Bank & Trust Co., (D. C. N. Y. 1935) 13 F. Supp. 493.

Corporations - Statutes Declaring Watered Stock Void - Effect Upon The Stockholder's Liability To Creditors

Michigan Law Review

Prior to the present era of "blue sky" laws providing for the careful scrutiny by the state of the issuance of stock, the evil of watered stock was sought to be curbed by constitutional and statutory provisions of a prohibitory and often penal nature. These statutes and constitutional provisions very generally take one of two forms.

The Colorado and the Arizona provisions are typical. In practical effect the two types of provisions are indistinguishable. The phrase "bona fide subscribers" in the Arizona form is construed to mean one who actually turns something of value over to the corporation in lieu …

Quasi-Contract As An Alternative Remedy For Inducing Breach Of Tort

Michigan Law Review

In an action for money had and received, plaintiff alleged that the International Railroad Company owed plaintiff $40,000 as compensation for services rendered under an existing and valid contract of employment; that with knowledge of this fact defendant corporation, representing that it, and not plaintiff, was entitled to this sum, fraudulently conspired with International Railway Company that this sum be paid defendant instead of plaintiff, and that said amount was paid defendant, resulting in unjust enrichment under circumstances in which the law implies a promise on defendant's part to pay said sum to plaintiff. In reversing a judgment sustaining a …

State "Blue-Sky" Laws And The Federal Securities Acts, Russell A. Smith

Michigan Law Review

With the current revival of business has come increased activity in the securities markets. Corporations are taking advantage of low money rates to refund outstanding issues and, to some extent, to obtain new money for corporate purposes. If the upturn in business proves to be substantial, rather than merely a temporary, government-induced short-time swing, the issuance of securities for the purpose of financing capital improvements will doubtless accelerate. Questions arising under the various laws, federal and state, for the regulation of the sale of securities will become increasingly important. Persons interested in the issuance and disposal of securities desire, of …

Corporations-Liability Of Promoters For Secret Profit

Michigan Law Review

In view of the peculiar position of control which a promoter occupies in relation to the proposed corporation, with resultant opportunities for making unconscionable profits, courts have uniformly regarded him as standing in a fiduciary relationship toward the corporation. Accordingly, when a promoter seeks to make a profit from a transfer of property to the corporation, he must obtain the consent of the latter under penalty of having to disgorge such profit at a later time at the suit of the corporation itself or persons acting in the latter's behalf. Such liability is to be distinguished from the liability of …

Corporations - Rights Of Creditors Of Insolvent Corporation - Greater Than Rights Of Corporation

Michigan Law Review

The dissenting and majority opinions of Justices Roberts and Cardozo in the recent case of McCandless v. Furlaud are illustrative of basically divergent conceptions of the status and function of the corporate receiver. In the following examination and evaluation of these conflicting positions, attention will be directed chiefly to those situations involving the problem of promoter's profits. The language and attitude of the courts, however, is typical of that adopted in all cases in which the questions considered arise and the conclusions suggested are of general application.

Attack On Decrees Of Divorce, Albert C. Jacobs

Michigan Law Review

This paper deals with attacks on decrees of divorce. The attack may arise in the state of the divorce or elsewhere. F-1 is used to designate the state in which the divorce was granted; F-2 a state other than that in which the decree in' question was rendered. The attack in F-1 may be on purely local or non-jurisdictional grounds, such as fraud, collusion, duress or perjury, or upon the ground that the proper jurisdictional requirements were lacking. The attack in F-2 will generally be on jurisdictional grounds, though in certain situations a decree has been impeached for non-jurisdictional factors. …

Corporations - Liability Of Directors To Creditors For Negligent Management

Michigan Law Review

There is much confusion in the cases concerning a director's liability to a creditor for negligent management of the corporation. A clearer answer might be indicated by an examination of analogous situations involving individuals instead of corporations. It adds confusion to the law to have a different rule for a corporation than for a human being, and such a result should be avoided unless separate treatment is required by something inherent in the corporation. The least that can happen if a court thinks along these lines is that it will be more likely to know what it is doing.

Quasi-Contracts-Joinder Of Misrepresenting Agent In Purchaser's Action Against Principal For Rescission

Michigan Law Review

Plaintiff was induced to purchase stock in defendant corporation through representations as to its previous earning power made by agents of the corporation who were also joined as defendants. Plaintiff sued on a theory of rescission to recover the value of property transferred in exchange for the stock in question. Held, the agents of the corporation were properly joined as defendants. Kaufman v. Jaffee, 244 App. Div. 344,279 N. Y. S. 392 (1935).

Contracts-Misunderstanding-Misrepresentation Of The Contents Of A Written Offer

Michigan Law Review

Ordinarily, a man who signs a written contract is bound by its terms in the absence of a misrepresentation of the contents of the writing or mutual mistake, although he may be under a misapprehension in regard to what the writing contains. This is true though the signer cannot read because of illiteracy or blindness. The law, proceeding on an objective theory of mutual assent, holds that it is his duty to read, or, if unable to do so, to get someone else to read for him. But, while unilateral misunderstanding not known to or caused by the other party …