Facts
Harris sold his business to J & R Construction on 2/1/88. The articles of incorporation were signed on 2/1/88 but were not filed with the Secretary of State until 2/3/88. J & R defaulted on the contract.
Procedural History
Harris sued the incorporators for judgment jointly and severally. The court refused to hold Avanell Looney and Rita Alexander liable, but held Joe Alexander liable since he signed the contract.
Issue(s)
Did the trial judge err in not holding all incorporators jointly and severally liable?
Holding(s)
No.
Reasoning/Analysis
Harris argued Arkansas law imposes joint and several liability on those purporting to act as a corporation knowing there is no incorporation. The Court found the evidence on the record showed only Joe Alexander signed the contract and promissory note on behalf of the corporation. The only evidence to show a corporation was statements made by Joe and Avanell while present. This was disputed, however, that Avanell was not present. The trial judge has great discretion in dealing with the evidence.
Judgment/Outcome
The Court affirmed the judgment of the trial court.
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