Acton Plumbing & Heating Co. v. Jared Builders, Inc., 41
| Decision Date | 31 December 1962 |
| Docket Number | No. 41,O,41 |
| Citation | 368 Mich. 626,118 N.W.2d 956 |
| Parties | ACTION PLUMBING & HEATING COMPANY, a Michigan corporation, Plaintiff and Appellee, v. JARED BUILDERS, INC., a Michigan corporation, et al., jointly and severally, Defendants and Appellants. ct. Term. |
| Court | Michigan Supreme Court |
Berger, Manason, Kayes & Ernstein, Robert S. Ernstein, Dotroit, for appellants.
Coy & Iannelli, Detroit, for appellee.
Before the Entire Bench, except ADAMS, J.
Plaintiff, a plumbing contractor, instituted this action in the Wayne circuit court to recover the balance due on work and materials furnished by plaintiff to Jared Builders, Inc., and the other defendants. The 3 individual defendants were the sole incorporators, officers and directors of all the corporate defendants. These individual defendants, through the several corporations, engaged in the building business in the Wayne county area. Plaintiff's claims are based upon transactions entered into with Jared Builders, Inc., for the performance of services and the furnishing of labor and materials.
Plaintiff's claim as set forth in the amended declaration alleged that although the several corporations were incorporated as separate entities, they actually were in fact operated as the agents, instrumentalities, buffers, tools and alter egos of the individual defendants, and they were actually started, organized, supervised and controlled by said individual defendants as though they were their own individual enterprises; funds were intermingled; payments were made to materialmen and suppliers without regard to the corporation which was actually obligated to perform the function; advances and loans were made to the individuals by the corporations without corporate authority and to suit the purpose of the individual defendants; new corporations were organized without payment of capital by the individuals who claimed to be stockholders. The suit attempted to obtain judgment against the individual defendants.
It was stipulated that the amount due and owing by Jared Builders, Inc., was $3,100 plus interest from June 1957. The issue on the trial was whether the corporate veil of Jared Builders, Inc., could be pierced to hold liable, in addition to Jared Builders, Inc., the individual and other corporate defendants, jointly and severally.
The trial court held the corporations were mere shams and that the record indicated not one of the corporations was operated as a legitimate corporation. Accordingly, the court rendered a judgment of $3,758.75 against all the defendants, jointly and severally.
Defendants on appeal contend the trial court erred in disregarding the corporate status of Jared Builders, Inc., by holding the individual and other corporate defendants liable.
Justice Bushnell, in Gledhill v. Fisher & Co., 272 Mich. 353, pp. 357, 358, 262 N.W. 371, p. 372, 102 A.L.R. 1042, stated the rule this way:
'Before the corporate entity may be properly disregarded and the parent corporation held liable for the acts of its subsidiary, I believe it must be shown not only that undue domination and control was exercised by the parent corporation over the subsidiary, but also that this control was exercised in such a manner as to defraud and wrong the complaint, and that unjust loss or injury will be suffered by the complainant as the result of such domination unless the parent corporation be held liable.'
Justice Butzel, writing for a unanimous court, in Herman v. Mobile Homes Corp., 317 Mich. 233, 243, 26 N.W.2d 757, 761, stated the rule as follows:
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...640 P.2d 1219 (1982); Syll. Pt. 3, Kilpatrick Bros. v. Poynter, 205 Kan. 787, 473 P.2d 33 (1970); Action Plumbing and Heating Co. v. Jared Builders, 368 Mich. 626, 118 N.W.2d 956, 958 (1962); Brown Bros. Equipment Co. v. State Highway Commission, 51 Mich.App. 448, 215 N.W.2d 591, 593 (1974)......
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...Bodenhamer Building Corp. v. Architectural Research Corp., 873 F.2d 109, 112 (6th Cir.1989); Acton Plumbing & Heating Co. v. Jared Builders, Inc., 368 Mich. 626, 118 N.W.2d 956, 958 (1962). From 1979 to 1983, Pulte purchased FRT plywood from Hoover Universal. During that period of time, Joh......
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...third party that could only be rectified by disregarding the separate existence of the entity. See Acton Plumbing & Heating Co. v. Jared Builders, Inc., 368 Mich. 626, 118 N.W.2d 956 (1962) ; Cinderella Theatre Co., Inc. v. United Detroit Theatres Corp., 367 Mich. 424, 116 N.W.2d 825 (1962)......
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