what was the judges final verdict and why?

NeedKarma

You know, there are lots of people named Solomon in the world and I'm assuming there are lots of civil cases and divorces between them. Can you a little more specific? Maybe scan the homework sheet and post it here?

LisaB4657

http://en.wikipedia.org/wiki/Salomon_v._Salomon_&_Co.

Fr_Chuck

Yes is it state court and if so what state, what nation for as that goes?

Is it divorce, business law, international law ?

Most good legal research can be done on www.findlaw.com but without more info to narrow the search it would be too hard to find correct info

LisaB4657

Strange. The link worked for me. Ok, here's a very basic summary:

Salomon v. Salomon & Co. was decided by the House of Lords in 1897. It was basically the first case to uphold the concept that a corporation is an independent legal entity.

Do a Google search for "Salomon v. Salomon" and you'll find tons of articles explaining it.

NeedKarma

Scott,

Roe vs Wade is well known in the US mainly. Ask someone about it in New Zealand and they give you a blank stare. Same goes with this UK case.

arunavcd

Even though late, I am gonna break it up for ya as much as possible.

There is the only concept which prevailed in the case of Salomon vs Salomon & Co.

The concept is nothing else but A COMPANY IS SEPARATE FROM ITS MEMBERS (SHAREHOLDERS). It simply means that the company is independent and separate from any other entities who are related to it (company).

Let me explain to you the case. It would be much more clearer to you.

Mr. Salomon had his own business of boot manufacturing, etc. It's not the main issue here.

Since his children wanted to be a part of the business as owners, Mr. Salomon sold his business to the New Company (the company, he was planning to form) for a certain amount of money (40000 pounds).

He was selling his business to the new company as he knew that the COMPANY IS SEPARATE LEGAL ENTITY.

He needed 7 members (shareholders) to form that company. Fortunately or unfortunately, he had 5 children. 7 members were found: 5 children, 1 wife, and Mr. Salomon himself.

So, he gave himself 20000 shares (1 pound each), 1 share to each child (total 5 shares for 5 children) and 1 share to his wife.

He elected his two children together with him to be the Directors of the company.

Let me refresh the case so that you get the points mentioned above. Mr. Salomon became a SHAREHOLDER, right? Yes. But the company still owes Mr. Salomon 20000 pounds, right? Yes ...

So, The company gives him debentures of 10000 pounds and rest 10000 pounds were paid in cash, etc.

Let me remind you ... Figures are not that important here. But remember that he is a SHAREHOLDER in the company, and now, a DEBENTURE HOLDER too.

Can you look back so that you get another point? He was a DIRECTOR also. So, He was SHAREHOLDER, DIRECTOR & DEBENTURE HOLDER.

He was an ORDINARY SHAREHOLDER who would be paid after all the creditors are paid IF THERE IS LIQUIDATION OF THE COMPANY.

But He was a Debenture Holder too.

Ok.... We are in the main part now ...

After 1 year, the company went into Liquidation (because the liabilities were more than assest by certain amount) and the creditors needed to paid.

The LIQUIDATOR asked Mr. Salomon to pay all the creditors since Mr. Salomon was the OWNER of the company.

Salomon did not agree with that. Because He (Salomon) was supposed to paid for his DEBENTURES. But the Liquidator asked him to pay to Other Creditors!!!!!

TRIAL JUDGE VAUGHAN WILLIAMS agreed with Liquidator and asked SALOMON to pay on behalf of the company since Salomon was the owner, but Salomon didn't agree.

He appealed to COURT OF APPEAL so that he (Salomon) didn't have to pay the debts owed to creditors by the company. COURT OF APPEAL said that Salomon just found 6 people (his 5 children & wife) to form the company. Those 6 people are mere nominees of Mr. Salomon. COURT OF APPEAL also asked Mr. Salomon to pay.


NOW PLEASE CONCENTRATE .....

This time Salomon appealed to the highest court "HOUSE OF LORDS".

HOUSE OF LORDS rejected all the judgments made by TRIAL JUDGE VAUGHAN WILLIAMS, COURT OF APPEAL.

HOUSE OF LORDS said that there is neither fraud in the manner which Mr. Salomon formed the company, nor Mr. Salomon formed the company for Fraudelent purpose.

So, Mr. Salomon did not have to pay to the COMPANY'S Creditors since Mr. Salomon and The Company are two Separate (Legal) Entities.The company is separate from its members....


I hope this helps ...

Note: The amounts might not be exact amounts .... Please focus on the words which are written in BLOCK LETTERS.

Please reply once you have read this.

Thanks ...

sambadejoko

Thanks for the response.

stiple

thanks arunav thank you very much for such a good answer there is another case that i would like you to explain us in the same manner this case is also of the same nature Lee Vs Lee Air Farming Ltd all i know about this case is that lee who had founded this company was the controlling shareholder and governing director of the company and was also employed as its chief pilot.While piloting an aircraft of the company in course of its business he was killed the question was whether he was a worker for the sake of workmen's compensation. The New Zealand Court Of appeal Held that he was not

cjoshi

thanx man 4 ur answer