MacPherson v. Eccleston

DRAPER, J.

Plaintiffs appeal from judgment in favor of all defendants in this action for injunction and for damages. The case was tried to the court sitting without a jury.

Defendants G. II. and Ethel B. Eccleston sold land to plaintiffs, knowing that they planned to construct a service station thereon. The deposit receipt, dated February 1, 1955, contained an agreement by the Ecclestons that other properties owned by them “in the immediate area” would not for 20 years be used for operation of a service station. Sellers also agreed that if they sold any such other properties, they would do so only upon a covenant restricting use thereof to purposes other than operation of a service station. Plaintiffs built and operated a service station on the land purchased from the Ecclestons. At the date of the deposit receipt, Ecclestons owned land adjoining that sold to plaintiffs. Other nearby land was owned by El Dorado Associates, Inc., a corporation, whose stock was almost wholly owned by defendants Eccleston. In August, 1957, El Dorado conveyed its land to Steffensen. In May, 1958, Steffensen leased a portion of this area to Standard Oil Company as the site for a service station. While the record is not clear, it is apparent that the Standard Oil site is quite close to the station of plaintiffs.

Plaintiffs brought this action against Ecclestons, El Dorado, Steffensen and Standard Oil, seeking to enjoin construction of the Standard station and praying for damages. The complaint is in three counts. It is alleged that defendants Eccleston, when they sold to plaintiffs, owned the property now leased to Standard Oil, that El Dorado is but the

alter ego

of the Ecclestons, and that all defendants conspired to violate the restrictive provisions of the sale from the Ecclestons to plaintiffs. Judgment was that plaintiffs take nothing.

The evidence establishes that at the time of the sale to

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plaintiffs, defendant C. H. Eccleston owned 485 shares of El Dorado. The remaining 15 shares were owned by his son. The father was president and the son -vice-president of the corporation. Plaintiffs introduced evidence that defendant C. H. Eccleston had, before the sale to plaintiffs, stated that “I,” or “we” owned the lands now shown to have been those of El Dorado. Eccleston denied such statements. There was evidence that El Dorado was incorporated in 1947 and then had 19 or 20 stockholders. Although defendant Eccleston and his son had acquired all the stock by the time of the sale of the Eccleston land to plaintiffs, there was no commingling of funds of the corporation and the Ecelestons, a separate bank account was maintained by the corporation, formal meetings of the corporation were held and detailed corporate records maintained.