Friday, November 22, 2013

Bartle v. Home Owners Co-op case brief

Bartle v. Home Owners Co-op case brief summary
127 N.E.2d 832 (1955)


CASE SYNOPSIS
Appellant sought review of the Appellate Division of the Supreme Court (New York), which affirmed a judgment of the Supreme Court in favor of appellee that dismissed appellant's complaint seeking to hold appellee liable for the contract debts of appellee's wholly owned subsidiary.

CASE FACTS
Appellant brought an action attempting to hold appellee liable for the contract debts of appellee's wholly owned subsidiary. Lower court dismissed appellant's complaint. Appellant's primary argument on appeal was that the courts below erred in refusing to pierce the corporate veil of wholly owned subsidiary's corporate existence.

DISCUSSION
  • The court affirmed the lower court. 
  • Court held that the law permitted the incorporation of the wholly owned subsidiary for the very purpose of escaping personal liability.
  • Court held that the doctrine of piercing the corporate veil was invoked to prevent fraud or to achieve equity. 
  • However, in this case there had been no evidence to support a finding of fraud, misrepresentation, or illegality. 
  • Appellee's purpose in placing its wholly owned subsidiary into a separate corporation was clearly within the limits of public policy. 
  • Thus, court affirmed the dismissal of appellant's complaint.

CONCLUSION
The court affirmed the dismissal of appellant's complaint, holding appellee was not liable for the contract debts of appellee's wholly owned subsidiary.

Recommended Supplements for Corporations and Business Associations Law

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