Jack C. Keir, Inc. v. Robinson & Keir Partnership

• Decision Date: 14 April 1989
• Docket Number: No. 88-058,88-058
• Citation: 151 Vt. 358,560 A.2d 957
• Court: Vermont Supreme Court
• Parties: JACK C. KEIR, INC. v. ROBINSON & KEIR PARTNERSHIP, Jack C. Keir and Lenord Robinson.

Page 957

560 A.2d 957

151 Vt. 358

JACK C. KEIR, INC. v. ROBINSON & KEIR PARTNERSHIP, Jack C. Keir and Lenord Robinson.

No. 88-058.

Supreme Court of Vermont.

April 14, 1989.

Craig Weatherly of Gravel and Shea, Burlington, for plaintiff-appellee.

T. Christopher Greene of Richard E. Davis Associates, Inc., Barre, for defendant-appellant Robinson.

Before ALLEN, C.J., PECK and DOOLEY, JJ., and BARNEY, C.J. (Ret.), Specially Assigned.

ALLEN, Chief Justice.

Defendant Lenord Robinson appeals from a judgment in plaintiff's favor in an action to recover sums due on loans to a partnership in which defendant had a half interest. We affirm. ^*

Plaintiff Jack C. Keir, Inc. is a corporation whose board of directors is chaired by Jack C. Keir, though he does not hold a majority of the shares. Jack C. Keir and defendant Robinson formed the Robinson & Keir Partnership in 1979 for the purpose of developing real estate in Warren. The partners each contributed $4,900 in capital, with the agreement providing that additional capital contributions would be made equally. Robinson argues, however, that the true understanding was that partner Jack C. Keir would "fund" the project, while defendant would "perform all the construction," but the trial court found otherwise. Jack C. Keir was, according to his own testimony, responsible for raising the funds to effect the partnership's plans, but that testimony does not answer the question of whether funds raised would become capital contributions or loans to the partnership. The trial court's determination that the "partners contributions to the partnership were to be equal" is supported by the evidence.

In addition to $329,000 which Jack C. Keir individually advanced to the partnership, the trial court found that plaintiff lent the partnership $196,878.74 from 1982 to 1984, evidenced by cancelled checks, and further found that the partnership books carried these amounts as loans, even though a promissory note was executed only for one advance, in the amount of $8,800.

Defendant on appeal disagrees with the trial court's interpretation of the evidence but does not demonstrate that the court's findings were clearly erroneous. Town of Wolcott v. Behrend, 147 Vt. 453, 455, 519 A.2d 1156, 1158 (1986). Defendant argues that neither the checks from plaintiff to the partnership, the partnership books reflecting loans from plaintiff, the payment of interest by the partnership on the loans, nor the promissory note for the first advance constituted evidence of loans from plaintiff, but does not tell us why the trial court's findings to the contrary were in error. Defendant rather argues the contrary effect of a letter written by Jack C. Keir to defendant dated June 28, 1983, proposing an amendment to the partnership agreement so that "funds supplied by the partners in excess of loans recognized by signed notes shall be considered additions to capital accounts of the respective partners." The partnership agreement was never, in fact, amended, and in any event, plaintiff corporation was never a "partner." And despite defendant's assertion that defendant Keir had been supplying the partnership with capital through Keir, Inc., the trial court found "insufficient evidence to conclude that the plaintiff was in fact the alter ego of one of the partners."

Again, while defendant contests that finding, he does not suggest why plaintiff's corporate status should be disregarded, beyond arguing that Jack C. Keir controlled Jack C. Keir, Inc. A corporation is a legal entity distinct from its stockholders. In re Towne Hill Water Co., 139 Vt 72, 76, 422 A.2d 927, 929 (1980). Except in cases where recognition of corporate status would result in fraud or injustice, courts will generally refuse to pierce the corporate veil. Village Press, Inc. v. Stephen Edward Co., 120 N.H. 469, 471-72, 416 A.2d 1373, 1375 (1980); Alterio v. Biltmore...