Carlesimo v. Schwebel’s Empirical Analysis

Citation profile

8 federal appellate · 2 district · 59 state decisions

Most-quoted passages

The sentences later courts lift from this opinion, ranked by how many decisions quote each — the parts of the opinion doing the work. These counts are smaller than the citation total above because most of the 69 citing decisions cite the case generally; a passage count includes only decisions quoting that exact language verbatim.

1. “"If a corporation is organized and carries on a business without substantial capital in such a way that the corporation is likely to have insufficient assets available to meet its debts, it is inequitable that the stockholders should set up such a flimsy organization to escape personal liability. The attempt to do corporate business without providing any sufficient basis of financial responsibilities to creditors is an abuse of the separate entity and will be ineffectual to exempt the stockholders from corporate debts. It is coming to be recognized as the policy of the law that stockholders should in good faith put at the risk of the business unencumbered capital reasonably adequate for its prospective liabilities. If the capital is illusory or trifling compared with the business to be done and the risks of loss, this is ground for denying the separate entity privilege. It has been stated that a corporation's capitalization is a major consideration of courts in deciding whether a legitimate separate corporate entity was maintained ... * * * * * * The adequacy of capital is to be measured as of the time of formation of the corporation. A corporation that was adequately capitalized when formed but which subsequently suffers financial reverses is not undercapitalized. [footnotes omitted]"”

   3 later decisions quote this exact passage
   e.g. Norris Chemical Co. v. Ingram · Norris Chemical Co. v. Ingram

2. ““. . . [T]he contract discloses, on its face, that the corporation was a contracting party. Certainly the trial court from such evidence could infer, reasonably, that appellant had knowledge of the existence of the corporation prior to and at the time the contract was executed. “The real question on this phase of the case is not whether appellant knew that the corporation was a party, but whether, before an agent will be released from liability on a contract executed on behalf of a corporation, the contract must not only disclose the name of the principal but must also, on its face, disclose the fact that the agent is signing in a representative capacity. In the present case, had Sehwebel appended the preposition ‘by’ immediately before his signature, there would be no doubt at all that the contract would have disclosed, on its face, not only that appellant was dealing with the corporation, but that Sehwebel was signing as an agent and not as a principal. Where that appears on the face of the contract the corporation is liable and the agent is not. (Armour & Co. v. Rosenberg & Sons Co., 36 Cal.App. 773 [ 173 P. 404 ]; Greve v. Taft Realty Co., 101 Cal.App. 343 [ 281 P. 641 ].)””

   1 later decision quote this exact passage
   e.g. Barrett v. Hammer Builders, Inc.

3. “the proper rule is that inadequate financing, where such appears, is a factor, and an important factor, in determining whether to remove the insulation to stockholders normally created by the corporate method of operation.”

   1 later decision quote this exact passage
   e.g. 47 Cal. 2d 792 - Automotriz Del Golfo De California v. Resnick