Question

Anderson Crossing Investments, Inc., was a family-owned property investment organization, investing in undeveloped properties when prices were low and then selling them when prices went up. Among its holdings, Anderson Crossing owned fifty acres of undeveloped land next to another fifty acres of undeveloped land owned by Kortney Branson. William Hill, property manager for Anderson Crossing, approached Branson and offered to purchase her fifty acres "for Anderson." Branson sold the property for $50,000. Within one year, Anderson Crossing sold its 100 acres, including the property bought from Branson, to a developer for $1,000,000. Richard Anderson, a 5% owner of Anderson Crossing Investments and an old high school acquaintance of Branson, saw her at the mall and told her of the recent sale. Furious that she had lost out on the income and convinced that Hill had misled her, Branson sued Richard Anderson for the acts of his agent, Hill. Branson argued that the facts were sufficient to create an agency by estoppel to impose liability on Richard Anderson.
a. The land in this case was originally owned by:______
b. At the time of sale to the mall, the land in this case was owned by:________
c. Richard Anderson was a________ owner of Anderson crossing investment Inc.

Answer 1

Answer:

Anderson Crossing Investments, Inc.

a. The land in this case was originally owned by:______

Kortney Branson.

b. At the time of sale to the mall, the land in this case was owned by:________

Anderson Crossing Investments, Inc.

c. Richard Anderson was a__limited liability______ owner of Anderson Crossing Investment Inc.

Explanation:

Anderson Cross Investment Inc. is a corporation in which stockholders enjoy limited liability.  Moreover, Anderson Cross Investment Inc. is separate from the owner, Richard Anderson under the Entity concept and separation of ownerships.  Hill is not an agent of Richard Anderson but Anderson Crossing Investments, Inc.

But specifically, limited liability describes the condition that prevails when an entity suffers loss in business.   The implication is that the loss that an owner or shareholder of an entity may suffer is limited to the capital invested in the business.  A stockholder's liability arising from his shareholding in the entity does not extend to his personal assets.   So, the concept considers the extent to which a company shareholder or director is financially responsible for the company's debts. The owners cannot be sued for the debts of the entity unless they have given their personal guarantees or a competent court of law lifts the corporate veil under specific circumstances.

The corporate veil, according to businessdictionary.com, is "a legal concept that separates the personality of a corporation from the personalities of its shareholders, and protects them from being personally liable for the company's debts and other obligations."

If Kortney Branson is serious in making a legal issue of the matter, she should sue the company that bought the land from her.  She can then join Hill and Richard Anderson if she wishes, though the two can submit "no case submissions."