Callas v. INDEPENDENT TAXI OWNERS'ASS'N

• Citation: 62 App. DC 212,66 F.2d 192
• Decision Date: 29 May 1933
• Docket Number: No. 5777.,5777.
• Parties: CALLAS v. INDEPENDENT TAXI OWNERS' ASS'N, Inc., et al.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

62 App. DC 212, 66 F.2d 192 (1933)

CALLAS v. INDEPENDENT TAXI OWNERS' ASS'N, Inc., et al.

No. 5777.

Court of Appeals of the District of Columbia.

Argued May 8, 1933.

Decided May 29, 1933.

Rehearing Denied June 23, 1933.

J. U. Gardiner, of Washington, D. C., for appellant.

Alfred D. Smith, of Washington, D. C., for appellees.

Before MARTIN, Chief Justice, and VAN ORSDEL, HITZ, and GRONER, Associate Justices.

HITZ, Associate Justice.

This is an appeal from a judgment of the Supreme Court of the District of Columbia in a negligence case growing out of a traffic accident.

The plaintiff is a fruit vender, injured while tending his pushcart in Fourteenth street near the Bureau of Engraving; the defendants are the Independent Taxi Owners' Association, Incorporated, and one Schou, driver of the cab involved in the accident, appellees here.

The company is sued as being "engaged with its members and associates under the trade name of Diamond Cab Company in the business of maintaining and operating and assisting to maintain and operate" a fleet of taxicabs in the city of Washington.

Schou is sued as a member, associate, agent, servant, or employee of the said corporation, operating the cab in question at the time of the accident with consent of the company and in furtherance of its business.

The case presents an aspect of the familiar but elusive problem of who is responsible for injuries caused by a cab performing under the colors and name of one of the so-called cab companies operating in Washington.

It is admitted here that the accident occurred by collision between the cab and the plaintiff or his pushcart; that the plaintiff was injured; that the cab bore the name of the Diamond Cab Company; was one of its fleet of cabs; and that Schou drove it at the time.

But it is denied that any negligence occurred on the part of the cab, or that the company was, or legally could be, responsible if any negligence had occurred.

The court directed a verdict for the company at the close of plaintiff's evidence, and the case proceeding against the driver alone, the jury returned a verdict in his favor; the court having refused to permit the attorney for the plaintiff to argue the case to the jury because he had testified as a witness in rebuttal.

The eight assignments of error present three questions — as to the correctness of the directed verdict; as to certain rulings on the evidence; and as to the refusal to permit plaintiff's attorney to argue the case.

The learned judge was of opinion throughout the trial, as he several times stated, that because a witness testified that the company was not engaged in the cab business, and because the accident occurred to a pedestrian and not to a passenger, the company could not be liable by way of estoppel or otherwise.

In pursuance of this view he declined to permit the plaintiff to fully develop in evidence the whole relationship in which the corporation stood to its so-called members, and sustained objections to questions as to how an applicant becomes a member of the association, how much he pays for entrance, by whom the association is represented before the Public Service Commission, and how extensive the advertising of the company is.

These questions were all held to be immaterial, but, in view of the uncertain nature of this relationship and the changing character of this corporation, as indicated by the evidence and the arguments of counsel, we are of opinion that the questions were material and should have been admitted.

For, by the original charter of the company, as here in evidence, the State of Delaware in January, 1926, undertook to authorize the company to engage in the taxicab business "in any part of the world"; in April, 1927, this accident occurred; in September, 1927, the company obtained registry in the Patent Office of its trade-name of Diamond Cab Company, its colors, and its emblems; in January, 1928, an amended charter was obtained, which was not offered in evidence, but which is said by the president of the company to expressly forbid its ownership of cabs.

The company now contends that it never accepted its original charter by which it was authorized to engage in the taxicab business and by virtue of which it obtained registry of its trade-name of Diamond Cab Company; yet admits that it is now receiving revenues amounting to thousands of dollars per month by licensing cab drivers to use that trade-name.

Such a situation, if developed by evidence, might well require the court to disregard the corporate entity and hold the individuals behind the corporation and receiving this revenue to be liable to persons negligently injured by these cabs, whether passengers or pedestrians.

"If any general rule can be laid down, in the present state of authority, it is that a corporation will be looked upon as a legal entity as a general rule, and until sufficient reason to the contrary appears; but, when the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons." United States v. Milwaukee Refrigerator Transit Co. (C. C.) 142 F. 247, 255; Bank v. Trebein Co., 59 Ohio St. 316, 52 N. E. 834; Luckenback S. S. Co. v. W. R. Grace & Co. (C. C. A.) 267 F. 676, 681; Lehigh Valley R. Co. v. Dupont (C. C. A.) 128 F. 840; In re Muncie Pulp Co. (C. C. A. 2d) 139 F. 546; Foard Co. v. State of Maryland (C. C. A.) 219 F. 827; Morewatz, Private Corporations, § 227; Maloney Tank Mfg. Co. v. MidContinent Petroleum Corp. (C. C. A.) 49 F. (2d) 146; Boatright v. Steinite Radio Corp. (C. C. A.) 46 F.(2d) 388; McCaskill Co. v. U. S., 216 U. S. 504, 514, 30 S. Ct. 386, 54 L. Ed. 590.

This action is based...