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Abbott v. Bob’s U-Drive

Oregon Supreme Court
352 P.2d 598 (1960)


Facts

In April 1952, Abbott (plaintiff) leased property to Robert E. Thompson. Under the terms of the lease, Thompson was to operate an automobile U-Drive business and an automobile leasing business. Any disputes arising out of the lease were to be settled in arbitration. Thompson subsequently incorporated Bob’s U-Drive (defendant) and Continental Leasing Company (Continental) (defendant). Thompson served as the president and manager of both corporations and owned half the stock of each. Although the two corporations were distinct entities, they operated out of the same office. The two corporations enjoyed an equal status as tenants of the leased premises. In August 1954, Thompson assigned his interest in the lease to Bob’s U-Drive in a written instrument. No such assignment was made to Continental Leasing Company. A few years later, a dispute relating to the rent arose and Abbott proceeded to initiate arbitration proceedings. Bob’s U-Drive conceded that it was subject to the arbitration clause of the lease. Continental, however, sought dismissal of Abbott’s petition to arbitrate. Continental argued that it was not bound by the arbitration clause because the lease had not been assigned to Continental. The circuit court nevertheless ordered Continental to arbitrate. At hearing, the arbitrators awarded Abbott $2,938.88. Continental appealed.

Rule of Law

Issue

Holding and Reasoning (O’Connell, J.)

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