From our private database of 22,300+ case briefs...
Obre v. Alban Tractor Co.
Maryland Court of Appeals
179 A.2d 861 (1962)
F. Stevens Nelson and Henry Obre (plaintiff) formed the Annel Corporation (Annel). Nelson and Obre believed that $40,000 in capital was “entirely adequate for the foreseeable needs of the corporation.” Nelson invested $10,000 in equipment and cash and was issued voting common stock with a par value of $10,000. Obre invested $65,548.10 in equipment and cash. Because Obre and Nelson ultimately wanted equal ownership, Obre was issued voting common stock with a par value of $10,000, non-voting preferred stock with a par value of $20,000, and an unsecured note for the remaining $35,548.10. The debt was to be paid in five years with interest. Annel became insolvent. The Circuit Court for Baltimore County had equity jurisdiction over the deed of trust issued for Annel’s creditors. Obre filed four claims as a general creditor based on the note. The other creditors, including Alban Tractor Co. (defendant), objected to Obre’s claims on the ground that the amount in question was a risk capital investment not a debt. The chancellor concluded that the equipment Obre contributed was necessary to the business and the five-year note was evidence that the contribution was a risk capital investment. The chancellor subordinated Obre’s claims to those of the other creditors on equity grounds. Obre appealed to the Maryland Court of Appeals.
Rule of Law
Holding and Reasoning
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 518,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 518,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 22,300 briefs, keyed to 984 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.