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Salomon vs Salomon
Please what was the judges final verdict and why?
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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?
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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 |
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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. |
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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. |
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Even though late, I am going to break it up for you 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... |
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Thanks for the response.
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 Originally Posted by arunavcd
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 |
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Comment on arunavcd's post
Thanks for enlightening my thought s regarding this case
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Thanks man 4 your answer
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Comment on arunavcd's post
Very helpful thanks
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Hiiii stiple
The Lee vs Lee Air Farming case is quite similar to th Solomon vs Solomon case. Below I send you a detail explanation. Lee v. Lee's Air Farming Ltd. (1960) [1961] A.C. 12 (New Zealand P.C.) The appellant's husband formed the respondent company for the purpose of carrying on the business of aerial top dressing. He held all the issued shares of the company with the exception of one. He was appointed governing director of the company for life and, pursuant to the company's articles of association, was appointed chief pilot of the company at a salary arranged by him. Article 33 also provided that in respect of such employment the relationship of master and servant should exist between him and the company. The husband was killed while piloting the company's aircraft in the course of aerial top dressing. His widow, the appellant, claimed compensation under the New Zealand Workmen's Compensation Act, 1922. On a case stated for its opinion on a question of law, the New Zealand Court of Appeal held that since the deceased was the governing director in whom was vested the full government and control of the company, he could not also be a servant of the company. The widow appealed. LORD MORRIS:... The substantial question which arises is, as their Lordships think, whether the deceased was a "worker" within the meaning of the Workers' Compensation Act, 1922, and its amendments. Was he a person who had entered into or worked under a contract of service with an employer? The Court of Appeal thought that his special position as governing director precluded him from being a servant of the company. On this view it is difficult to know what his status and position was when he was performing the arduous and skilful duties of piloting an aeroplane which belonged to the company and when he was carrying out the operation of top-dressing farm lands from the air. He was paid wages for so doing. The company kept a wages book in which these were recorded. The work that was being done was being done at the request of farmers whose contractual rights and obligations were with the company alone. It cannot be suggested that when engaged in the activities above referred to the deceased was discharging his duties as governing director. Their Lordships find it impossible to resist the conclusion that the active aerial operations were performed because the deceased was in some contractual relationship with the company. That relationship came about because the deceased as one legal person was willing to work for and to make a contract with the company which was another legal entity. A contractual relationship could only exist on the basis that there was consensus between two contracting parties. It was never suggested (nor in their Lordships' view could it reasonably have been suggested) that the company was a sham or a mere simulacrum. It is well established that the mere fact that someone is a director of a company is no impediment to his entering into a contract to serve the company. If, then, it be accepted that the respondent company was a legal entity their Lordships see no reason to challenge the validity of any contractual obligations which were created between the company and the deceased... Nor in their Lordships' view were any contractual obligations invalidated by the circumstance that the deceased was sole governing director in whom was vested the full government and control of the company. Always assuming that the company was not a sham then the capacity of the company to make a contract with the deceased could not be impugned merely because the deceased was the agent of the company in its negotiation. The deceased might have made a firm contract to serve the company for a fixed period of years. If within such period he had retired from the office of governing director and other directors had been appointed his contract would not have been affected. The circumstance that in his capacity as a shareholder he could control the course of events would not in itself affect the validity of his contractual relationship with the company. When, therefore, it is said that "one of his first acts was to appoint himself the only pilot of the company," it must be recognised that the appointment was made by the company, and that it was none the less a valid appointment because it was the deceased himself who acted as the agent of the company in arranging it. In their Lordships' view it is a logical consequence of the decision in Salomon's case that one person may function in dual capacities. There is no reason, therefore, to deny the possibility of a contractual relationship being created as between the deceased and the company. If this stage is reached then their Lordships see no reason why the range of possible contractual relationships should not include a contract for services, and if the deceased as agent for the company could negotiate a contract for services as between the company and himself there is no reason why a contract of service could not also be negotiated. It is said that therein lies the difficulty, because it is said that the deceased could not both be under the duty of giving orders and also be under the duty of obeying them. But this approach does not give effect to the circumstance that it would be the company and not the deceased that would be giving the orders. Control would remain with the company whoever might be the agent of the company to exercise it. The fact that so long as the deceased continued to be governing director, with amplitude of powers, it would be for him to act as the agent of the company to give the orders does not alter the fact that the company and the deceased were two separate and distinct legal persons. If the deceased had a contract of service with the company then the company had a right of control. The manner of its exercise would not affect or diminish the right to its exercise. But the existence of a right to control cannot be denied if once the reality of the legal existence of the company is recognised. Just as the company and the deceased were separate legal entities so as to permit of contractual relations being established between them, so also were they separate legal entities so as to enable the company to give an order to the deceased... Appeal allowed Hope you are satisfied... do send a comment... :) |
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Critically evaluate the case of Salomon VS Salomon. This should be up to 10 pages. Thanks
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Originally Posted by chinyekwam
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I'm really satisfied about aruna's answer... but if I ask How many judges comprised the court which decided Salomon v Salomon's case, what would be the answer?
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Comment on arunavcd's post
I found it helpful because she/he has given me what I need though she/he didn't go indeep but I got it, and she/he made me remember the case verywell because I read it when I was in my second year in Business/Company law.
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Describe the decisions in the legal case of salomon vs. salomon
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Hello rum:
Dude! You ain't paying attention. excon |
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Originally Posted by NeedKarma
Salomon vs Salomon is about Business Law.. it is very famous story and in that case there were very important concepts which will need to practice as law. Before his case there is nothing about it in law... so it make famous... you read it |
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