This is somewhat off the cuff, but I would think the former:

That is, once liable for wrongfully turning over money to a corporation, one could not cut off liability for future torts of the corporation (or its agents) simply by selling one’s shares, since in doing so one would merely be putting the purchaser of those shares in a position to exercise the various rights associated with share ownership.

In a partnership situation by contrast, one could cut off one’s practical exposure to liability for potential future torts of the partnership (or its agents) by exercising a right to force a liquidation of the partnership’s assets.

Thanks,
Araglin

So, in the situation you described in cent #2, would the original investor *always* be liable? Or can he sell/abandon his liability?

Maybe he can’t, I don’t know. I think we’re getting closer to a conclusion, though.

1. Supra-individual juridical persons (i.e. “entities” or “corporations” in the broadest sense) are ontologically real, not a “legal fiction,” not creatures of the state or of positive law. The positive law only appears to have created them via a usurpation (the so-called Concession Theory), and through its selective and rather arbitrary recognition of some real group-persons as legal corporations, its refusal to acknowledge other real group-persons as legal corporations (Here the state is deploying a kind of “nominalism” or bad-indidividualism often against entities that pose some threat to it and that it cannot be easily coopted or controlled by the state; e.g. Henry VIII’s dissolution of the monasteries, Chapelier’s Law, the non-recognition of the group-personhood of unions in earlier labor history), as well as its recognition of some non-real goup-persons as legal corporations (what one might call ‘paper entities’). For more on this, I would strongly recommend that aspiring libertarian-law gurus pull out there Robert Nisbet here, or better yet: Read Otto von Gierke, FW Maitland, John Neville Figgis, or GDH Cole.

2. I think Quasibill is right about how the foreseeability of tortious use of one’s money before investing can constitute sufficient control and causality to give rise to shareholder liability. however, Kinsella’s point about how (after that), one only owns a few rights in the corporation’s assets (a right to receive pro rata distributions upon the declaration of dividends and upon liquidation, a right to vote periodically on certain narrowly defined issues, etc.) does I think mean that a non-controlling shareholder who purchased his/her share(s) in the secondary market would not be liable qua shareholder even though he/she perhaps purchased the shares from someone who would be.

“And from my viewpoint, you continue (for over 2 years!) to miss the point.”

Pretty impressive, no?

“The shareholders certainly are owners of the capital they initially invested into the stock certificate.”

This kind of make-it-up-as-you-go-along terminology is telling. What in the world are you talking about? In any event, so what? You are question-begging.

” Whether or not you want to actually respond to what is being argued *here*, as opposed to what you’ve heard others, especially your evil leftist strawmen, once argue somewhere that sounds Marxist, the argument here is that they are responsible for that decision. I know that you don’t like people to actually be responsible for their actions, so long as it allows their Galtian selfs to get rich, but I do.:

I have no idea what you are jabbering about, but sure, people ought to be held responsible for their actions.

“Again (for the 5th?6th time?), you’ve already conceded that a person could be liable for loaning their car to an obviously intoxicated person.”

Really? Do tell, where did I say this, and now?

“Similarly, a shareholder who makes no effort whatsoever to determine whether his investment is being used properly, or takes no effort to curtail foreseeable negligence on the part of the person they are giving their property to, can be found to be liable *for that decision*.”

But why?

“Again (it really is like ramming into a brick wall with you, because you constantly try to have the debate you want to have, instead of the debate that is actually going on, but I’ll try one more time), it is eminently foreseeable”

foreseeable! ha! are you a law student?

“that an OTR rig driver will generate a negligence claim at some point in the course of his duties.”

It’s alos foreseeable that if you buy a Hershey bar, you are contributing funds to an entity that will someday have an employee that causes someone damage via tort. Are you responsible?

“As such, anyone hiring an OTR driver should be expected to take precautions against such liability”

Are the shareholders hiring the rig driver? Say–do you really know what a shareholder is?

” - they shouldn’t be shocked that they, as principal, are found liable for the negligence of their agent in this endeavor.”

Yes, and if you go to gaol for using marihuana, you should not be shocked. So?

“Similarly, it is eminently foreseeable that directors and managers will try to externalize costs in an effort to raise shareholder value.”

The wealth-maximizing utilitarians called, they want their sellout, unprincipled reasoning back.

“To the extent that limited liability positive law shields shareholders from this liability (and it does, as I have told you repeatedly and cited for you at least once), it is a state granted privilege. The fact that *after* they have made the delegation of their property they have no further control is utterly irrelevant to the point I have made repeatedly for over 2 years. I’ll repeat it again, just for you to cut and paste out of context to a venue where comments are not allowed: YOUR ARGUMENT THAT SHAREHOLDERS HAVE NO CONTROL *AFTER* THEY HAVE INVESTED IS IRRELEVANT HERE. THEY ARE RESPONSIBLE FOR THEIR DECISION TO INVEST WITH NO FURTHER CONTROL IN THE FIRST PLACE.”

But not all shareholders are investors. So what in the world are you talking about? What status or action of a shareholder is it that you say imputes liability to him? Is it having given money? but not all do; and some customers and lenders give more. Is it the right to vote for directors? What?

“Until you at least address the real argument, I consider the exchange over.”

I hereby address the real argument. Now what?

And from my viewpoint, you continue (for over 2 years!) to miss the point. The shareholders certainly are owners of the capital they initially invested into the stock certificate. Whether or not you want to actually respond to what is being argued *here*, as opposed to what you’ve heard others, especially your evil leftist strawmen, once argue somewhere that sounds Marxist, the argument here is that they are responsible for that decision. I know that you don’t like people to actually be responsible for their actions, so long as it allows their Galtian selfs to get rich, but I do.

Again (for the 5th?6th time?), you’ve already conceded that a person could be liable for loaning their car to an obviously intoxicated person. Similarly, a shareholder who makes no effort whatsoever to determine whether his investment is being used properly, or takes no effort to curtail foreseeable negligence on the part of the person they are giving their property to, can be found to be liable *for that decision*. Again (it really is like ramming into a brick wall with you, because you constantly try to have the debate you want to have, instead of the debate that is actually going on, but I’ll try one more time), it is eminently foreseeable that an OTR rig driver will generate a negligence claim at some point in the course of his duties. As such, anyone hiring an OTR driver should be expected to take precautions against such liability - they shouldn’t be shocked that they, as principal, are found liable for the negligence of their agent in this endeavor.

Similarly, it is eminently foreseeable that directors and managers will try to externalize costs in an effort to raise shareholder value. To the extent that limited liability positive law shields shareholders from this liability (and it does, as I have told you repeatedly and cited for you at least once), it is a state granted privilege. The fact that *after* they have made the delegation of their property they have no further control is utterly irrelevant to the point I have made repeatedly for over 2 years. I’ll repeat it again, just for you to cut and paste out of context to a venue where comments are not allowed: YOUR ARGUMENT THAT SHAREHOLDERS HAVE NO CONTROL *AFTER* THEY HAVE INVESTED IS IRRELEVANT HERE. THEY ARE RESPONSIBLE FOR THEIR DECISION TO INVEST WITH NO FURTHER CONTROL IN THE FIRST PLACE.

Going back to the car example, if the lender sets up a business by hiring an aggressive young manager to act as his manager, and says “I relinquish all control of my inventory to you, with no further control by me possible, just pay me my profits” and the young manager subsequently lends the vehicle to an obviously intoxicated person, I would argue that liability accrues to the original owner, because his decision in delegating his property was careless, if not reckless.

No one ever (except for certain company plans, which, of course, would be a possible exception here, depending on circumstances) forces anyone to invest in anything. That you choose to invest is your decision, for which you can be liable for results that foreseeably flow from it. No amount of changing the subject can change that point, and as far as I can tell, you have never once (in the many, many exchanges spanning two years) even attempted to refute this argument. Until you at least address the real argument, I consider the exchange over.

Brad: “Kinsella sets preconditions that essentially assume the point he intends to make. Rights of enterprise control and potential liability are both results of “ownership”. By arbitrarily accepting the reality of shareholder rights of enterprise control and arbitrarily disregarding the ownership those same rights of enterprise control result from in the first place, then he himself is removing potential liability from consideration through his own God-like fiat. He acknowledges the rights of enterprise control, but ignores the reason for them, ownership, and thereby ignores all other results of ownership he finds inconvenient. The immaculately conceived shareholders of Kinsella-world don’t have to be owners in order to control the enterprise and don’t have to face potential liability BECAUSE HE (or the state) SAYS SO.”

I think you continue to miss the point. You can classify people as owners as you find this classificaiton useful. but you guys seem to try to *first* find out whether someone ontologically “is” an owner “or not”–and then, you deduce responsibility from this. I think this is too binary, too mechanistic, too un-nuanced, and too reliant on artificial, mostly statist, taxonomies and classifications. I say: let’s first ask: why should A be liable for B’s torts? Prima facie, he should not (A is shareholder; B is tortfeasor-employee). Unless we can find some extra, good reason to attribute B’s liability to A. I can think of several possible grounds–if A had conspired with B; or coerced B; or commanded B as part of a military institution. But I don’t see that any of these things obtains, merely on the grounds that A is a shareholder. Saying, “but he’s an owner” just is an attempt to short-circuit this reasoning. Show me exactly what role A played in causing or being responsible for B’s tort–by A’s nature as shareholder–that is, his right to receive some profit, his possible investment of some money, his occasional right to vote for directors. Which of these capacities or statuses makes him responsible?

In my view, the basis of shareholders not being properly liable is that they do not control the enterprise. If the power to get a vote once a year on who will make up the board of directors, and nothing else, is sufficient to establish control, then voters are in control of the US government.

What? Dude, my interests are in things like libertarian rights, legal theory. I don’t claim to be a some master ninja tactician expert. I do try to separate truth and substance, from strategical, rhetorical, tactical, activist concerns–that is, I don’t confuse a proposals’ popularity, appeal, or ability to persuade with its soundness.

As for what “concepts” are most “important” in “fighting the state”–I find such dorm-room bull session talk to be … unappealing. Sure, we need to identify our enemies–sure, the state is a ruler. As far as I can tell, however, the bad guys have won, and will continue to. I like fighting on my self-chosen side of righteousness and goodness, even though we will continue to lose. If you think trotting out another strategy or polishing up another argument will finally do the state in–have it it, good sir, with my blessing.