Court of Appeals of New York
127 N.E.2d 832 (1955)
Home Owners Co-op (defendant) was organized to provide low-cost housing to its members, mostly veterans. Westerlea Builders, Inc. was organized as a wholly owned subsidiary of Home Owners, to construct housing. When Westerlea began to have financial difficulties, its creditors took over construction responsibilities pursuant to an extension agreement. Westerlea was later adjudicated bankrupt. Bartle (plaintiff), Westerlea’s trustee in bankruptcy, brought suit against Home Owners, claiming it is liable for Westerlea’s contract debts. The trial court found that during the period when creditors extended credit, Home Owners and Westerlea maintained outward indications of being two separate corporations. The trial court also found that the creditors were not misled, that there was no fraud, and that Home Owners’ actions had not injured Westerlea’s creditors by depleting assets or otherwise. Finally, the trial court held that the creditors could not dispute the existence of separate corporate entities because of the extension agreement. The Appellate Division affirmed. Bartle appealed, arguing that the lower courts erred in refusing to pierce the corporate veil of Westerlea.
Rule of Law
Holding and Reasoning (Froessel, J.)
Dissent (Van Voorhis, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 217,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,100 briefs, keyed to 189 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.