Green v. Equitable Powder Mfg. Co.
Decision Date | 27 January 1951 |
Docket Number | Civ. No. 928. |
Citation | 95 F. Supp. 127 |
Parties | GREEN v. EQUITABLE POWDER MFG. CO. |
Court | U.S. District Court — Western District of Arkansas |
COPYRIGHT MATERIAL OMITTED
Gutensohn & Ragon and John E. Harris, all of Fort Smith, Ark., for plaintiff.
Hardin, Barton & Shaw, Fort Smith, Ark., for defendant.
In an opinion filed November 30, 1950, the court sustained a motion to dismiss the original complaint in so far as any recovery upon warranty was concerned and overruled the motion in so far as alleged liability on account of negligence was concerned. Green v. Equitable Powder Manufacturing Co., D.C.W.D.Ark., 94 F.Supp. 126.
Thereafter, with the permission of the court, plaintiff filed an amended complaint on December 20, 1950. By the amended complaint, plaintiff seeks to impose the liability of a manufacturer as well as that of a mere dealer upon the defendant, Equitable Powder Manufacturing Company, hereinafter referred to as Equitable. In this regard, plaintiff alleges:
Plaintiff reasserts that he is entitled to recover for injuries suffered because of the delayed rather than instantaneous explosion of the dynamite by the allegedly defective dynamite cap upon a warranty theory; that even though the defendant was a dealer only and the merchandise was not sold to the plaintiff but to the plaintiff's employer that defendant should be held liable for the breach of the warranties of fitness of purpose and merchantability; and also for negligence on the allegation that the defendant owed him the duties of a manufacturer as well as of a dealer. In the latter respect the doctrine of res ipsa loquitur is alleged to be applicable.
Defendant has filed a motion to dismiss alleging (1) "under those allegations of the complaint * * * it is not shown or alleged that the three corporations * * * were incorporated and their identities separated for any wrongful purpose, and it is not alleged that by reason of the separate identities of said corporations the plaintiff has been damaged in any manner whatsoever or any wrong done him; or does the amended complaint contain any facts by which it is alleged that either of said corporations has done any act in contravention of public policy, or violated any statutory inhibitions or perpetrated any fraud or committed any wrong"; (2) that the defendant is not liable as the manufacturer for any breach of warranty; (3) that the defendant is not liable as a seller for any breach of warranty; (4) that defendant is not the manufacturer, but in any event the manufacturer is not liable to plaintiff on negligence theory because there was no privity between manufacturer and plaintiff; (5) that defendant is not liable to plaintiff under any theory of negligence because there was no privity of contract between plaintiff and defendant; and (6) that the doctrine of res ipsa loquitur has no application to the facts as pleaded in the amended complaint.
This motion is before the court for determination, and will be disposed of upon a consideration of the points of defendant's motion in the order set forth therein. The court must proceed under the well established rule "that there is no justification for dismissing a complaint for insufficiency of statement unless it appears to a certainty that the plaintiff would be entitled to no relief under any state of facts which could be proved in support of the claim. Dennis v. Village of Tonka Bay, 8 Cir., 151 F.2d 411, 412.
As a general rule courts will respect the separate corporate existence of corporations, but there are instances where the ends of justice require that separate existence be disregarded. As expressed in Nichols & Co. v. Secretary of Agriculture, 1 Cir., 131 F.2d 651, 655, quoting from Owl Fumigating Corp. v. California Cyanide Co., 3 Cir., 30 F.2d 812, 813: "When, as against the general rule that two separately incorporated companies are separate and distinct entities, it is charged that one is a mere agency or department of the other and is used as an instrumentality to perpetrate fraud, justify wrong, avoid litigation or render it more difficult, or generally to escape liability for what are in substance its own acts, courts will put aside the screen and, looking upon the situation through the group of negative rules, determine affirmatively the truth and place responsibility where it actually belongs."
And, in Darling Stores Corp. v. Young Realty Co., 8 Cir., 121 F.2d 112, 116, the court said: "And courts will ignore the fiction of corporate legal entity when the circumstances justify it, and when it is used as a subterfuge to defeat public convenience, justify wrong, or perpetrate a fraud."
The rule is the same in Arkansas. In Rounds & Porter Lbr. Co. v. Burns, 216 Ark. 288, 290, 225 S.W.2d 1, 2, the court, in disregarding corporate entities to fix liability on the controlling corporation, said:
Disregarding corporate entities is the exception rather than the rule, and the plaintiff must shoulder the burden of establishing facts justifying this action. In attempting to discharge this burden, the plaintiff should bear in mind: ...
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