Pores v. Purity Milk Co.

FINLEY, J. pro tem.

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This appeal is from the judgments in three separate cases which were consolidated for trial. The

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appeal is founded upon only one issue which is common to all three cases, that issue being whether appellants are entitled to redress from respondent Edward Alves personally by reason of circumstances which appellants claim justify disregarding the corporate shield of a California corporation set up by Alves and others and known as “Purity Milk Co.” Appellants maintain that the corporation was merely the

alter ego

of Edward Alves; that in all transactions involved prior to the time the corporation was declared bankrupt and ceased to do business he conducted business as an individual and looked to the corporate entity only as a shield to protect him from liability. The trial court found against appellants, holding that the facts and circumstances did not warrant disregard of the corporate entity and the fixing of personal liability on respondent Alves excepting for obligations maturing or incurred by him after bankruptcy proceedings had been instituted as a result of which the corporation had ceased doing business.

In plaintiffs’ opening brief appears this statement:

“At the outset, Appellants concede that the question of disregard of the corporate entity and the application of the theory of alter ego generally involves a factual determination by the trial court on the issue of whether the corporate entity is or is not to be disregarded and in the ordinary case the Appellate Courts are bound by the determination of the trial court on such matters. However, it is the Appellants’ contention that in this particular case the evidence directing the disregard of the corporate entity is overwhelming and conclusive, and secondly, that under the factual situation presented in these cases, the corporate entity

must, as a matter of law, be disregarded.”

We agree with appellants that cases of this nature must, of necessity, depend upon a factual determination by the trial court, but we must also carry the proposition a step further and repeat what has so often been said, viz., that if the factual determination made by the trier of fact is supported by competent and legally sufficient evidence, an appellate court is bound by that determination even though there may be an abundance of record evidence to the contrary. We say record evidence advisedly, because only words, documents and material evidence can ordinarily constitute a record on appeal. The attitude, demeanor, conduct or appearance of the witnesses are not fully reflected, even though perchance some remark or statement appearing in the