Frank McAnarney and Joseph Lemon entered into an agreement to promote a corporation to engage in the manufacture of farm implements. Before the corporation was organized,
McAnarney and Lemon solicited subscriptions to the stock of
the corporation and presented a written agreement for the subscribers to sign. The agreement provided that the subscribers
would pay $100 per share for stock in the corporation in consideration of McAnarney and Lemon’s agreement to organize
the corporation and advance the preincorporation expenses.
Thomas Jordan signed the agreement, making application for
one hundred shares of stock. After the articles of incorporation
had been filed with the secretary of state but before the charter
was issued to the corporation, Jordan died. The administrator of Jordan’s estate notified McAnarney and Lemon that the
estate would not honor Jordan’s subscription.
After the formation of the corporation, Franklin Adams
signed a subscription agreement making application for one
hundred shares of stock. Before the corporation accepted the
subscription, Adams informed the corporation that he was
canceling it.
a. Can the corporation enforce Jordan’s stock subscription
against Jordan’s estate? Explain.
b. Can the corporation enforce Adams’s stock subscription?
Explain.