Busch Pipe & Supply Co. v. Kemble

FINCH, P. J.

Plaintiff brought the above-entitled actions to foreclose liens claimed by it for materials alleged to have been sold to the defendant Comstock & Howard and used by that corporation, as contractor, in the construction of buildings at Arrowhead Lake for the defendants Kemble and Arrowhead Lake Company, respectively. The two cases were tried together on the same evidence and separate judgments were entered in favor of the plaintiff as prayed for. Separate appeals have been taken from the

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judgments, the defendants, Arrowhead Lake Company and Title Insurance and Trust Company being the appellants in both cases. The record on appeal is contained in a single transcript and both appeals have been argued together.

Comstock & Howard was a corporation. All of its capital stock except one share was owned by C. G. Comstock, F. W. Howard, and MacNeal Swasey. Prior to the sale of the materials for which the plaintiff claims a lien, Comstock & Howard had entered into contracts with Kemble and Arrowhead Lake Company, respectively, for the construction of the buildings in question, which' involved large expenditures of money. “They handled the jobs on a percentage contract.” Howard testified that in order to make a profit on materials furnished for the buildings and to have a “supply that would be available in.quantity,” the stockholders of Comstock & Howard organized the defendant Lakewood Lumber Company, a corporation. The stockholders in the two corporations were the same, except that one share of stock in the latter corporation was held by a person who ivas not a stockholder in the former, the purpose evidently being to qualify such person to act as a director. The connection between the two corporations was so close that Howard testified that he could not say for which corporation he was acting in ordering plumbing materials from the plaintiff, “because, as we all know, the interests of these two corporations were combined so closely I never considered who I was acting for.” The two corporations kept separate books of account, however, and the Lakewood Lumber Company sold some materials to other contractors than Comstock & Howard. A director of the Lakewood Lumber Company testified that “99% of the business done by the Lakewood Lumber Company was with Comstock & Howard.” The former company made a profit of from twenty-five per cent to forty per cent on the materials furnished to the latter.