Owl Fumigating Corporation v. California Cyanide Co., 3918.
| Citation | 30 F.2d 812 |
| Decision Date | 18 February 1929 |
| Docket Number | No. 3918.,3918. |
| Parties | OWL FUMIGATING CORPORATION v. CALIFORNIA CYANIDE CO., Inc. |
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
Charles F. Curley, of Wilmington, Del. (Richard B. Cavanagh, Harry C. Bierman, and Livingston Gifford, all of New York City, of counsel), for appellant.
John F. Neary and Dean S. Edmonds, both of New York City, for appellee.
Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
The defendants, corporations bearing the same name but organized under the laws of different states, are charged by the bill with infringement of certain of the plaintiff's letters patent. Direct infringement is charged against the California company, an operating subsidiary of the Delaware company, and contributory infringement is charged against the Delaware company, the holding corporation, in that it authorized, directed and controlled the acts of the former company. To sustain these averments the plaintiff alleged and proved facts from which it asked the court to find identity of corporations involving liability of one, upon the ground of agency or alter ego, for infringing acts of the other. The law which it invoked and applied to the facts is familiar and not open to dispute. It consists of rules which from the nature of the questions to which they apply are in the abstract, and are mainly negative in character. For instance, these rules declare that similarity or identity of corporate names does not alone disturb or bring together distinct corporate entities; that ownership of capital stock of one corporation by another does not alone create identity of interests or the relation of principal and agent between the two; that identity of officers does not alone establish identity of corporations and make one liable for the torts of the other; that the mere loan of money even in large amounts by one corporation to another does not alone make the borrower the agent of the lender or make the lender liable for the acts of the borrower; that participation by the lender in the management of the borrower's business for the purpose of protecting its debt does not make the lender liable for the borrower's debts. 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...
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