Shea v. Leonis

THE COURT.

A rehearing was ordered herein in order to give further consideration to the contentions of the defendants. A reexamination of the questions raised on the appeal has confirmed the conclusions reached in the former opinion. We therefore adopt as the opinion of this court on rehearing the opinion prepared by the late Justice Seawell and previously filed, as follows:

“This is an action to recover accrued rent in the sum of $16,833.33, with interest, and also taxes and assessments in the amount of $5,435, which the lessee agreed by the lease to pay. Plaintiffs appeal from the judgment entered for defendants upon counts one, two, four and five of the complaint after the sustaining of defendants’ general and special demurrers to said counts.

“Defendant J. B. Leonis, Inc., assignee of a ninety-nine year lease, transferred said lease to defendant Boyle Avenue

[668]

Investment Company. The rent herein sued for accrued subsequent to this transfer. The court below held good count three of the complaint, which states a cause of action against Boyle Avenue Investment Company as last assignee of the lease. The court also held good count six as against J. B. Leonis, Inc. Said count alleged that by the terms of the lease an assignment thereof did not operate to release the assignor from liability on the lease if at the time of the assignment it was in default as to any terms of the lease. It averred that J. B. Leonis, Inc., was in default upon the covenants of the lease on December 21, 1931, when it assigned said lease to Boyle Avenue Investment Company.

“It appears from the counts involved on this appeal that defendants J. B. Leonis, Sr., and J. B. Leonis, Jr., own all stock of J. B. Leonis, Inc., which is described as a ‘ financially responsible company’. The stock of Boyle Avenue Investment Company stands in the names of J. B. Leonis, Jr., and Adelina P. Leonis, his wife. The theory of plaintiffs is that defendant Boyle Avenue Investment Company is but the

alter ego

of its stockholders, and that it was organized for the sole purpose of taking an assignment of the lease and is without other assets, with the result, plaintiffs contend, that the separate corporate identity of said company should be disregarded and its stockholders held for the rent herein sued for.