Opinion ID: 1371056
Heading Depth: 1
Heading Rank: 2

Heading: There was sufficient evidence to support a judgment against Sargent.

Text: In Epton v. Moskee Investment Co. et al., 180 Or. 86, 93, 174 P.2d 418, 421 (1946), we said that: It is well settled that, when corporate entity is used to accomplish fraud or injustice, the courts will disregard it, and will look through the corporate form to the real actor or actors in the transaction. 18 C.J.S., Corporations, section 7b; Anderson, Limitations of Corporate Entity, sections 21, 23, 48; Security Sav. & Trust Co. v. Portland Flouring Mills Co., 124 Or. 276, 288, 261 P. 432; Murray v. Wiley, 169 Or. 381, 399, 127 P.(2d) 112, 129 P.(2d) 66; Anno., 1 A.L.R. 610, 613; 34 A.L.R. 597, 600. This rule is applicable whether the stock is owned by one person or by many, or by another corporation.    In a number of cases this court has applied this principle by disregarding or looking through the corporate form to the real actors as the alter ego of the corporation when the corporate entity would otherwise be used to accomplish fraud or injustice. [6] The alter ego theory of piercing the corporate veil as a means of preventing fraud or injustice has been criticized for its indefiniteness and because of the absence of objective standards by which the application of that theory can be determined. [7] In this case we need not decide whether or not the verdict and judgment may be affirmed on the ground that Industrial Covers was the alter ego of Sargent because there was ample evidence to support a judgment against Sargent on the theory that it was the principle, if not the real party in interest; that Industrial Covers was its agent, if not its instrumentality, and that Sargent also promised and undertook to perform warranty obligations under this contract. Although involving different facts, our decision in Portland T. & S. Bank v. Lincoln Realty Co., 180 Or. 96, 170 P.2d 568 (1946), is nevertheless of interest in considering the facts of this case. In that case we said (at 116, 170 P.2d at 576), as may also be said in this case, that: This appears to be an instance in which a subsidiary corporation was formed (or acquired) by its parent for the purpose of making the subsidiary an agency of the parent. (Emphasis added) See also Annot., 38 A.L.R.3d 1102, 1111 and 1116 (1972). [8] In 2 Williston on Contracts (3d Ed. 1959) 182-183, § 274, it is stated that: In general no formality is necessary for the appointment of an agent to contract on behalf of his principal. `There is no particular mode or method which must be adhered to in order to create or establish agency. Regardless of the terms used by the parties, or by what name the transaction is designated, if the facts fairly disclosed that one party is acting for or representing another, by the latter's authority the agency exists.' and (at 187): Whether an agency has in fact been created is a question of law and is to be determined by the relations of the parties as they exist under their agreements or acts. If relations exist which will constitute an agency, it will be an agency whether the parties understood the exact nature of the relation or not.    Similarly, in Young v. Neill et al., 190 Or. 161, 174, 220 P.2d 89, 94, 225 P.2d 66 (1950), this court recognized the rule that: An agency may be implied from attending circumstances and the apparent relations and conduct of the parties.    To the same effect, see Pokorny v. Williams, 199 Or. 17, 40, 260 P.2d 490 (1953); Boise-Payette L. Co. v. Dominican Sisters, 102 Or. 314, 325, 202 P. 554 (1921). Cf. Briggs v. Morgan, 262 Or. 17, 23, 496 P.2d 17 (1972). In this case there was a letter proposal on the stationery of Industrial Covers, Inc., dated February 2, 1970, and a letter accepting that proposal, directed to Industrial Covers. However, two of the answers filed or tendered on behalf of both defendants,    admit that they sold to Plaintiff an air supported structure   . Although that admission may not have been binding as a judicial admission and although in its brief Sargent contended that it was an inadvertent admission, that admission was included in two separate pleadings prepared by competent counsel. No showing of mistake or inadvertence was made at the time of trial. In addition, there was evidence that all of the contracts by plaintiff both before and after the letters of February 2, 1970, were with Sargent; that Industrial Covers was not only a wholly owned subsidiary, but had no employees of its own, and that Sargent subsequently not only assured plaintiff that it would undertake the performance of the contract warranties, but actually undertook to perform at least some of the repair work, whether as warranty work or not. In our opinion, this evidence was more than sufficient to support the judgment against Sargent. This result is supported by decisions of other courts under similar, although not identical facts. See Pacific Can Co. v. Hewes, 95 F.2d 42 (9th Cir.1938); Herman v. Mobile Homes Corporation, 317 Mich. 233, 26 N.W.2d 757 (1947). See also Baker v. Chock Full O'Nuts Corp., 30 A.D.2d 329, 292 N.Y.S.2d 58 (1968), and New York Trust Co. v. Carpenter, 250 F. 668 (6th Cir.1918). See also Annot., 38 A.L.R.3d, supra at 1116 and 1132. Cf. Berger v. Columbia Broadcasting System, Inc., 453 F.2d 991, 994 (5th Cir.1972), as cited by defendants.