Hayhurst v. Boyd, 5594

CourtUnited States State Supreme Court of Idaho
Writing for the CourtBUDGE, J.
Citation50 Idaho 752,300 P. 895
PartiesNATHAN HAYHURST, Appellant, v. T. O. BOYD et al., Respondents
Decision Date08 June 1931
Docket Number5594

300 P. 895

50 Idaho 752

NATHAN HAYHURST, Appellant,
v.

T. O. BOYD et al., Respondents

No. 5594

Supreme Court of Idaho

June 8, 1931


DISCOVERY-INSPECTION OF BOOKS AND PAPERS-MOTION-AFFIDAVIT, SUFFICIENCY OF-CORPORATIONS-STOCKHOLDERS-LIABILITY FOR CORPORATE DEBTS AND ACTS.

1. Affidavit supporting motion for order to inspect books, not disclosing documents desired nor showing contents or relevancy thereof, held insufficient as evidence on noncompliance with order (C. S., sec. 7193).

2. Generally, corporation will be regarded as legal entity except when legal fiction is used to defeat public convenience and perpetrate fraud.

3. Stockholder is not personally liable for acts of corporation's servants with which he was not personally connected (C. S., sec. 4728; Const., art. 11, sec. 17).

4. That individual sought to be held personally liable for judgment against corporation was holder of majority of stock held [50 Idaho 753] insufficient to disregard corporate entity (C. S., sec. 4728; Const., art. 11, sec. 17).

5. To disregard corporate entity, there must be unity of interest and ownership between corporation and individual sought to be held personally liable for judgment against corporation (C. S., sec. 4728; Const., art. 11, sec. 17).

6. Corporation held not required to own property with which its business was conducted.

7. Evidence held insufficient to show fraud, neglect, or misconduct by principal stockholder sufficient to disregard corporate entity and hold stockholder individually liable for judgment against corporation (C. S., sec. 4728; Const., art. 11, sec. 17).

APPEAL from the District Court of the Eleventh Judicial District, for Twin Falls County. Hon. Hugh A. Baker, Judge.

Action on judgment. Judgment for defendants. Affirmed.

Judgment affirmed; costs to respondents. Petition for rehearing denied.

James R. Bothwell and W. Orr Chapman, for Appellant.

When necessary to redress fraud, protect the rights of third persons or innocent parties, or prevent palpable injustice, law and equity will interfere and set aside the legal fiction of corporate entity or existence and will hold such corporation obligated for the acts of the sole owner of the corporation, or the corporation and stockholders will be treated as identical entities, with identical duties and obligations to the same extent and as they would be bound in the absence of the existence of the corporation. (Wenban Estate v. Hewlett, 193 Cal. 675, 227 P. 723, and cases cited; Pierce v. National Bank of Commerce, 13 F.2d 40; 14 C. J., p. 129, sec. 119; Offeman v. Robertson-Cole Studios, 80 Cal.App. 1, 251 P. 830; Louisville & N. R. Co. v. Carter, 226 Ky. 561, 10 S.W.2d 1064; Bryan v. Banks, 98 Cal.App. 748, 277 P. 1075.)

Upon the failure of a party to comply with an order of the court requiring the production for inspection of papers or documents the court must assume the facts to be such as the party seeking the production and inspection, alleges them to be in his moving papers. (C. S., sec. 7193; Robinson v. Rispin, 33 Cal.App. 536, 165 P. 979; Georgia Iron & Coal Co. v. Etowah Iron Co., 104 Ga. 395, 30 S.E. 878; 22 Cyc. 966, sec. 120 1/2; 18 C. J. 1181; Iasigi v. Brown, 12 F. Cas. No. 6993; Waller v. Stewart, 29 F. Cas. No. 17,109; Bloede Co. v. Joseph Bancroft & Sons Co., 110 F. 76.)

Homer C. Mills, Walters, Parry & Thoman and J. R. Keenan, for Respondents.

The liability of corporation stockholders is limited by Constitution and statute to the amount unpaid upon stock subscriptions, and without a showing of anything unpaid on stock subscriptions there is no liability of the respondents.

Even if Boyd Hospital was a one-man corporation, and that one man is T. O. Boyd, it is none the less a corporation with all of the features of a corporation. (Sun River Stock & Land Co. v. Montana Trust & Sav. Bank, 81 Mont. 222, 262 P. 1039; Elenkrieg v. Siebrecht, 238 N.Y. 254, 144 N.E. 519, 34 A. L. R. 592; Fletcher, Cyc. Corps., sec. 109.)

The debts of Boyd Hospital are not the debts of T. O. Boyd even if he is the sole owner of its capital stock. (National Oil Transport Co. v. United States, 18 F.2d 305; City of Winfield v. Wichita Natural Gas Co., 267 F. 47; State v. Tacoma Ry. & Power Co., 61 Wash. 507, 112 P. 506, 32 L. R. A., N. S., 720; Kniese v. Fairfax Incline R. Co., 96 Cal.App. 427, 274 P. 382; Peckett v. Wood, 234 F. 833, 148 C. C. A. 431; Finn v. George T. Mickle Lumber Co., 41 F.2d 676.)

The affidavits made for the orders of inspection stating facts only on information and belief are incompetent as evidence, and on appeal will be presumed to have been disregarded by the trial court. (Kullman, Salz & Co. v. Superior Court, 15 Cal.App. 276, 114 P. 589.)

The showing made by the appellant was entirely insufficient to entitle him to the order of inspection, and such order was highly improper. (Georgia Iron & Coal Co. v. Etowah Iron Co., 104 Ga. 395, 30 S.E. 878; Wallace Bank & Tr. Co. v. First Nat. Bank, 40 Idaho 712, 237 P. 284, 50 A. L. R. 316; Federal Min. & Smelting Co. v. Public Utilities Com., 26 Idaho 391, 143 P. 1173, L. R. A. 1917F, 1195.)

BUDGE, J. Givens, Varian and McNaughton, JJ., concur.

OPINION

[50 Idaho 755] BUDGE, J.

In an action against the Boyd Hospital, a corporation, for damages on account of injuries alleged to have been sustained while a patient in the hospital, appellant recovered a money judgment December 22, 1922, which was by this court affirmed on appeal. (Hayhurst v. Boyd Hospital, 43 Idaho 661, 254 P. 528.) On the appeal from the judgment against it, the hospital corporation did not execute an undertaking in the way of a supersedeas to stay execution, and execution on the judgment was issued and levy made October 23, 1923, on certain personal property, consisting of equipment and furnishings of the hospital, and on certain real property. Thereupon a demand was made, supported by affidavit, for the release of the property levied upon, for the assigned reason that none of such property was owned by the judgment debtor, the Boyd Hospital. Nothing further was done in consequence of the levy. Shortly thereafter the instant action was commenced by appellant against T. O. Boyd and members of his family (individually and as trustees...

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13 practice notes
  • Minich v. Gem State Developers, Inc., No. 12468
    • United States
    • United States State Supreme Court of Idaho
    • February 16, 1979
    ...court stated in Tom Nakamura, Inc. v. G. & G. Produce Co.,93 Idaho 183, 457 P.2d 422 (1969), quoting with approval from Hayhurst v. Boyd, 50 Idaho 752, 300 P. 895 " 'To warrant casting aside the legal fiction of distinct corporate existence . . . it must also be shown that there is such a u......
  • Maroun v. Wyreless Systems, Inc., No. 30407
    • United States
    • United States State Supreme Court of Idaho
    • May 3, 2005
    ...observance of the fiction of separate existence would, under the circumstances, sanction a fraud or promote injustice." Hayhurst v. Boyd, 50 Idaho 752, 761, 300 P. 895, 897 (1931) (citations omitted). The complaint in this case had previously only alleged Robinson was a director and officer......
  • Davidson v. Beco Corp., No. 16263
    • United States
    • Idaho Court of Appeals
    • December 26, 1986
    ...a fraud or promote injustice. [Emphasis added.] Chick v. Tomlinson, 96 Idaho 483, 486, 531 P.2d 573, 576 (1975) (quoting Hayhurst v. Boyd, 50 Idaho 752, 761, 300 P. 895, 897 The record in this case contains abundant evidence to demonstrate a unity of interest and ownership. The evidence ind......
  • In re Carlson, Bankruptcy No. 09-00970-TLM.
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — District of Idaho
    • March 19, 2010
    ...or promote injustice. Id.; see also Maroun v. Wyreless Sys., Inc., 141 Idaho 604, 114 P.3d 974, 983 (2005) (quoting Hayhurst v. Boyd, 50 Idaho 752, 300 P. 426 B.R. 851 895, 897 (1931)). Such a determination should be made "cautiously and only where circumstances justify it." Jolley v. Idaho......
  • Request a trial to view additional results
13 cases
  • Minich v. Gem State Developers, Inc., No. 12468
    • United States
    • United States State Supreme Court of Idaho
    • February 16, 1979
    ...court stated in Tom Nakamura, Inc. v. G. & G. Produce Co.,93 Idaho 183, 457 P.2d 422 (1969), quoting with approval from Hayhurst v. Boyd, 50 Idaho 752, 300 P. 895 " 'To warrant casting aside the legal fiction of distinct corporate existence . . . it must also be shown that there is such a u......
  • Maroun v. Wyreless Systems, Inc., No. 30407
    • United States
    • United States State Supreme Court of Idaho
    • May 3, 2005
    ...observance of the fiction of separate existence would, under the circumstances, sanction a fraud or promote injustice." Hayhurst v. Boyd, 50 Idaho 752, 761, 300 P. 895, 897 (1931) (citations omitted). The complaint in this case had previously only alleged Robinson was a director and officer......
  • Davidson v. Beco Corp., No. 16263
    • United States
    • Idaho Court of Appeals
    • December 26, 1986
    ...a fraud or promote injustice. [Emphasis added.] Chick v. Tomlinson, 96 Idaho 483, 486, 531 P.2d 573, 576 (1975) (quoting Hayhurst v. Boyd, 50 Idaho 752, 761, 300 P. 895, 897 The record in this case contains abundant evidence to demonstrate a unity of interest and ownership. The evidence ind......
  • In re Carlson, Bankruptcy No. 09-00970-TLM.
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — District of Idaho
    • March 19, 2010
    ...or promote injustice. Id.; see also Maroun v. Wyreless Sys., Inc., 141 Idaho 604, 114 P.3d 974, 983 (2005) (quoting Hayhurst v. Boyd, 50 Idaho 752, 300 P. 426 B.R. 851 895, 897 (1931)). Such a determination should be made "cautiously and only where circumstances justify it." Jolley v. Idaho......
  • Request a trial to view additional results

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