Also known as: misapply · misapplied · misapplies
Written by attorneys · grounded in primary & secondary sources — see below
An improper or illegal use of funds or property lawfully held. The concept triggers entity liability when a partner or general partner receives non-partner money or property in the course of business and then diverts it, and it supplies a statutory ground for corporate dissolution when directors waste assets.
Musa Mensah, managing partner of a torts firm, received a settlement check made payable to the partnership while handling a client's case. He deposited the funds into an account he alone controlled and spent them on cryptocurrency that later lost all value. The client sued the partnership for the lost proceeds.
Leandro, a fifty-percent shareholder and director of Horizon Films, directed most of the company's available cash to a film starring his relatives while rejecting superior commercial offers. Kaitlyn petitioned for dissolution, citing the cash allocation as waste of corporate assets. The court considered whether the redirection supplied grounds under the statute.
Select any source to read its text and confirm it supports the definition.
Christian, managing general partner of Nova Firm, received a settlement check payable to the limited partnership while litigating a client's mass-tort claim. He placed the funds in a personal account and converted them to cryptocurrency that declined sharply in value. The client sued the partnership to recover the lost proceeds.
A state legislature enacted a statute that commentators argued rested on a misapplication of the maxim that enumeration of certain rights implies negation of others. Challengers contended the statute improperly limited retained rights protected by the Ninth Amendment. The court examined whether the legislative reasoning reflected such a misapplication.
A state court entered a personal judgment against a non-resident defendant without proper service and then authorized sale of the defendant's property. The defendant argued the judgment rested on a misapplication of principles governing extraterritorial jurisdiction. The reviewing court addressed whether the lower court's reasoning constituted such a misapplication.
A public university denied funding to a student publication on the ground that its religious viewpoint disqualified it from neutral subsidy programs. The publication argued the denial reflected a misapplication of First Amendment neutrality rules. The court considered whether the university's policy rested on such a misapplication.
A partnership is liable when a partner receives money or property of a non-partner in the course of partnership business or with actual or apparent authority and then misapplies it. The rule focuses on the authorized receipt rather than the partner's later personal use. Limited partners' lack of knowledge does not shield the entity.
Model Business Corporation Act section 14.30(a)(2)(iv) authorizes dissolution when corporate assets are being misapplied or wasted. A shareholder may petition when directors allocate funds to personal projects and reject commercially superior opportunities. The ground is independent of deadlock or oppression claims.
Yes. Uniform Limited Partnership Act section 403(b) imposes liability on the limited partnership when a general partner receives non-partner funds in the course of partnership activities and misapplies them. The rule mirrors the general partnership provision and protects third parties who deliver funds to the entity name.
…children. Similarly, in the Gong Lum case, the plaintiff, a child of Chinese descent, contended only that state authorities had misapplied the doctrine by classifying him with Negro children and requiring him to attend a Negro school. In the Kansas case, the court below found substantial equality as to all such factors. 98 F.…