ASSIGNMENT
1.Arthur, Barbara, Carl, and Debra decided to form a corporation for bottling and selling apple cider. Arthur, Barbara, and Carl were to operate the business, and Debra was to supply the necessary capital but was to have no voice in the management. They went to Jane, a lawyer, who agreed to organize a corporation for them under the name A-B-C Inc., and paid her funds sufficient to accomplish the incorporation. Jane promised that the corporation would definitely be formed by May 3. On April 27, Arthur telephoned Jane to inquire how the incorporation was progressing, and Jane said she had drafted the articles of incorporation and would send them to the Secretary of State that very day. She assured Arthur that incorporation would occur before May 3. On May 4, relying on Jane’s assurance, Arthur, with the approval of Barbara and Carl, entered into a written contract with Grower for the latter’s entire apple crop. The contract was executed by Arthur on behalf of “A-B-C Inc.” Grower delivered the apples as agreed. Unknown to Arthur, Barbara, Carl, Debra, or Grower, the articles of incorporation were never filed, through Jane’s negligence. The business subsequently failed. What are Grower’s rights, if any, against Arthur, Barbara, Carl, and Debra as individuals?
2. The Pyro Corporation has outstanding twenty thousand shares of common stock, of which nineteen thousand are owned by Peter B. Arson; five hundred shares are owned by Elizabeth Arson, his wife; and five hundred shares are owned by Joseph Q. Arson, his brother. These three individuals are the officers and directors of the corporation. The Pyro Corporation obtained a $750,000 fire insurance policy to cover a certain building it owned. Thereafter, Peter B. Arson set fire to the building, and it was totally destroyed. Can the corporation recover from the fire insurance company on the $750,000 fire insurance policy? Why or why not?
3. A corporation formed for the purpose of manufacturing, buying, selling, and dealing in drugs, chemicals, and similar products contracted to purchase, under authority of its board of directors, the land and building it occupied as a factory and store. Collins, a shareholder, sues in equity to restrain the corporation from completing the contract, claiming that as the certificate of incorporation contained no provision authorizing the corporation to purchase real estate, the contract was ultra vires. Can Collins prevent the contract from being executed? Why or why not?
4. Amalgamated Corporation, organized under the laws of State S, sends several traveling salespersons into State M to solicit orders, which are accepted only at the home office of Amalgamated Corporation in State S. Riley, a resident of State M, places an order which is accepted by Amalgamated Corporation in State S. The Corporation Act of State M provides that “no foreign corporation transacting business in this state without a certificate of authority shall be permitted to maintain an action in any court of this state until such corporation shall have obtained a certificate of authority.” Riley fails to pay for the goods, and when Amalgamated Corporation sues Riley in a court of State M, Riley defends on the ground that Amalgamated Corporation does not possess a certificate of authority from State M. Result?
5. Dr. North, a surgeon practicing in Georgia, engaged an Arizona professional corporation consisting of twenty lawyers to represent him in a dispute with a Georgia hospital. West, a member of the law firm, flew to Atlanta and hired local counsel with Dr. North’s approval. West represented Dr. North in two hearings before the hospital and in one court proceeding, also negotiating a com- promise between Dr. North and the hospital. The total bill for the law firm’s travel costs and professional ser- vices was $21,000, but Dr. North refused to pay $6,000 of it. When the law firm brought an action against Dr. North for the balance owed, he argued that the action should be dismissed because the law firm failed to register as a foreign corporation in accordance with the Georgia Corporation Statute. Will the law firm be prevented from collecting on the contract? Explain.
