I worked for a guy once who had a piece of farmland. Right behind his land was another piece of land that did not have road access. He had a farm lane bisecting his land and he let kids use it freely to access the hills on the other land with their bikes.
A real estate developer bought the other piece of land. He hired a lawyer who filed a lawsuit saying that after a number of years of access that farm lane had become a public road even though those kids were illegally accessing that other piece of land.
The real estate developer won his case and had the farm lane paved and declared a county road. The developer then started a subdivision and eventually purchased my bosses land to extend it. If my boss had kept his farm gate shut and padlocked none of it would have happened but he was trying to be a nice guy and paid dearly for it.
This was extremely scummy of the real estate developer and I'm surprised it actually happened. Do you have any idea how the real estate developer and their lawyers managed to win the case?
Actually the law is often on their side, so it was likely not hard. Around here this happens all the time and so people are aware that gates need to be locked, signs posted etc, otherwise a Prescriptive Easement may be created :
http://www.dirtlawyer.com/pe-summary.html
IANAL but I have paid one in the past to get advice on this subject. ymmv, laws vary by jurisdiction, etc.
According to grandfather’s sibling[0], it may be that the crossing onto the other land became a subject of an adverse possession. Apparently in such a case you’re supposed to have a clear notice[1] on the property in question if you don’t want to lose it.
What you are describing could probably be construed to be Adverse Possession by a motivated lawyer. In this case you would actually now own the tree, and thus the previous owner would not be able to sell your tree in the first place. https://en.wikipedia.org/wiki/Adverse_possession "Adverse possession is a method of acquiring title to real property by possession for a statutory period under certain conditions, viz: proof of non-permissive use which is actual, open and notorious, exclusive, adverse, and continuous for the statutory period."
I washed your car once. The car was clean. You own the car and all the papers are under your name. I did not immediately ask for payment, and did not sign anything.
5 years later, when you sell your car, I show up and say I am entitled to ownership of your car because I washed it 5 years ago. There is a photo of me washing your car, so I am clearly involved. Do I own a part of your car?
Washing someone's car does not entitle you to ownership of it. Founding a company and working for the company without pay does entitle you to equity in that company -- that is where the equity comes from; investments into the company and the labor of its founders (until hiring employees who are being compensated for their time and are not automatically entitled to equity, though a compensation plan might grant it).
> Washing someone's car does not entitle you to ownership of it. Founding a company and working for the company without pay does entitle you to equity in that company
Yes but washing the car without pay, is the same as working for a company without pay. In both cases there was labor without pay. Labor without pay does not mean ownership.
He didn't "found" the company, otherwise there would be legal documents proving he already has equity in the company. Basically he's saying that getting an office is the same as "founding" a company, which is similar to saying that washing a car is the same as "owning" a car.
Until a company is incorporated, who do you think owns the company? Nobody at all?
Does that mean I could go and incorporate your company for you and give myself all the equity? After all, you didn't incorporate it and give yourself equity already.
In lieu of another contract, everyone who started the company together is an equal partner.
It clearly states that Kyle incorporated the company before even meeting Jeremy. Kyle incorporated it mid-Sept-2013, and then met Jeremy end-of-Sept-2013. Jeremy then left Nov-2013, and never worked on Cruise again.
> Until a company is incorporated, who do you think owns the company? Nobody at all?
If a company is not incorporated, then it's NOT a company. There is nothing to own. For it to be legal you need to incorporate and pay taxes.
> Does that mean I could go and incorporate your company for you and give myself all the equity?
Yes, if I have a company for years and not incorporate, and not pay taxes, and operate without the government knowing, you can incorporate a company with the same name and at the same address and give the equity to yourself. You would have to pay all the taxes, register all the trademarks etc. but at the point you are essentially doing so much work running a company anyways there's no doubt that it's essentially your company.
> In lieu of another contract, everyone who started the company together is an equal partner.
That's my point. You don't need another contract. The incorporation and the equity papers IS the contract. If he had equity, he is a partner. If he didn't, he is not. That's the contract.
Yes, everyone who did the original incorporation is an equal partner, that's fine I agree with that. But clearly Jeremy WAS NOT part of the original incorporation, and NEVER owned ANY stock after all these years. He wants to be paid AS IF he was the one who incorporated the company, AS IF he had equity.
You seem to be operating with a bizarre definition of the law.
I have a consulting company. It has clients, it has revenue, and I pay taxes on that revenue. It even has a trade name.
It is not incorporated. That does not mean that you can come along, incorporate it, and say the company actually belongs to you.
By default, the result of your work is your property. This is a central concept of property rights. You can transfer that property to others in exchange for compensation, but without a contract the work remains yours.
Thus, everyone whose work flows into a company automatically is receiving a portion of that company (it is a result of their work) unless some other agreement overrides that (ex. I agree to a vesting schedule).
You cannot be bound by a contract you didn't sign. Jeremy never signed anything agreeing to give up the equity he is automatically entitled to.
> You seem to be operating with a bizarre definition of the law.
Well that seems like a personal attack. Maybe stick to the facts and not me and you?
> I have a consulting company. It has clients, it has revenue, and I pay taxes on that revenue. It is not incorporated. That does not mean that you can come along, incorporate it, and say the company actually belongs to you
Yes, exactly my point. You just proved it. In this case you (Kyle) have papers you filed with the government proving ownership of your consulting company, and paid taxes etc. It would be wrong for others (Jeremy) to come along and claim ownership of it simply because they did some paperwork that had no direct impact on the company getting clients or revenue. You just proved my point.
> By default, the result of your work is your property.
Agree.
> Thus, everyone whose work flows into a company automatically is receiving a portion of that company
Disagree. If I do volunteer work for a non-profit or school, I don't own a portion of that non-profit or school. Yes, I own the work I did, and I am entitled to take it back or discontinue it, but my work does not automatically "convert" to ownership of the organization in the absence of signed forms.
If I made a magazine for a non-profit, without being paid, I own the magazine, it's my IP, and I am entitled to stop the non-profit from using my magazine at any time. But I don't get to "own" a part of the non-profit simply because I own the magazine.
Owning my work, and owning equity in someone else's company that have used my work in the past, are 2 separate things entirely.
There is a difference between company and corporation. A company can exist without being incorporated (and many are never incorporated), a corporation cannot.
That's not the point. We are not arguing about semantics about the type the entity here. We are arguing about ownership. it doesn't matter if it's a C-corp vs LLCs etc.
The point is, there is a legal entity, with papers clearly showing Kyle has ownership and Jeremy does not.
You and a friend washed a car once. You didn't charge anything for it. You, but not your friend, continued washing the car every week, whether it was clean or dirty.
When you went to the owner for payment, he gave you $300 for washing it. You washed it approximately 15 times. Your friend requests 1/16th of the payment.
He also claims that without his help in the first place, this would not have converted into a paid venture for either of you (which is hard to prove), and therefore that initial input was worth more than the 1/16th, and requests an additional % of the share.
When you went to the owner for payment, he gave you $300 for washing the car. The owner gave you, not your friend. You. The owner only wants to pay you for your efforts, and at not point wanted to pay your friend.
Instead of asking the owner for payment, your friend now demands part of your $300, because you are less intimidating to bully around.
Your friend also demands a portion of all the money from all other cars you have washed after that time you washed a car together. Because if it wasn't for that first car wash together, he claims you would not have been able to figure out the sales process for washing cars for money. So he is entitled to dividends for eternity.
You and I planted a tree together. It looked like it was going to be a nice tree, so we filed a joint application for funding from the city. The application was successful but I left before the funding came through.
Years later, it turns out that this was a bona fide money tree. I think you and the city should put my name on some branches, since I was there in the beginning. If it takes 48 months for the tree to reach maturity, and I was there for the first month, then 1 branch for every 48 of your branches seems fair.
You and I planted a tree together, and applied for funding from the city. You didn't show up for the interview. In the end the application was successful because of the effort of others on the team.
At this point, no one owns the tree. I decide to officially file for ownership of the tree from the city government, paid all the filing fees, and was granted 100% of the tree with all the papers from the government.
5 years later, on the day I am about to sell my tree, you sue me for ownership of the tree. Does that seem fair?
Or let's put this another way.
I go on crunchbase, find 30 startups in Palo Alto, take their team info and write an application to an incubator and put myself as co-founder. I tell these startups about this and some of them decide to just ignore me because it's not worth the effort to tell me to go away.
Years later, one of the startups is about to get sold. I have made zero contributions to the startups, but there is an application saying I had the title of co-founder. I decide I am entitled ownership of the company, because I helped them apply to an incubator. I sue them to block their acquisition.
The owner of the tree now sells the tree. Am I now entitled to a portion of those proceeds?