Cranson v. International Business Machines Corp.

200 A.2d 33 (1964)

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Cranson v. International Business Machines Corp.

Maryland Court of Appeals
200 A.2d 33 (1964)

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Facts

Albion Cranson Jr. (defendant) invested, along with several others, in a new business called the Real Estate Service Bureau (the bureau) and was elected its president. The bureau was intended to be a corporation, and a certificate of incorporation was signed and acknowledged. While Cranson was working as the bureau’s president, the International Business Machines Corporation (IBM) (plaintiff) contracted with the bureau to sell the bureau eight electronic typewriters. IBM acknowledged the bureau’s corporate existence and dealt with the bureau during this transaction as if it were a corporation. However, in reality, the bureau’s attorney had failed to file the bureau’s articles of incorporation. The articles were not properly filed until after IBM and the bureau executed the contract for the typewriters. The bureau made partial payments on the contract but left an unpaid balance of $4,333.40. IBM sued Cranson in his individual capacity for the unpaid balance under the theory that the bureau was not a corporation when executing the contract. Rather, IBM argued, the bureau was a partnership, and Cranson, as the member primarily responsible for the contract, was personally liable for the partnership’s obligations under the contract. The trial court issued summary judgment in favor of IBM, and Cranson appealed.

Rule of Law

Issue

Holding and Reasoning (Horney, J.)

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