Case Name: B. H. SIRMONS, Appellant, v. ARNOLD LUMBER COMPANY, a corporation, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1964-05-27
Citations: 167 So. 2d 588
Docket Number: No. 4106
Parties: B. H. SIRMONS, Appellant, v. ARNOLD LUMBER COMPANY, a corporation, Appellee.
Judges: ALLEN, Acting C. J., concurs and WHITE, J., concurs specially.
Reporter: Southern Reporter, Second Series
Volume: 167
Pages: 588–595

Head Matter:
B. H. SIRMONS, Appellant, v. ARNOLD LUMBER COMPANY, a corporation, Appellee.
No. 4106.
District Court of Appeal of Florida. Second District.
May 27, 1964.
Rehearing Denied Oct. 9, 1964.
Linney & McNevin, St. Petersburg, for appellant.
Askew & Beckett, St. Petersburg, for appellee.

Opinion:
BARNS, PAUL D., Associate Judge.
An execution on a judgment in favor of Arnold Lumber Company, the appellee, against Sirmons Supply Company, Inc., having been returned nulla bona, "Arnold" instituted supplemental proceedings against B. H. Sirmons, the president of the "Supply Company," as a consequence of which the court held that the execution could be satisfied out of the personal assets of B. H. Sirmons, whereupon Sirmons appealed. We find error and reverse.
The lower court judge's findings of fact were that B. H. Sirmons in effectuating his various and diverse business promotions employed the policy of operating through a variety of corporations that Sirmons Supply Company, the debtor corporation, was set up and designed to carry out the purposes of Sirmons and was the alter ego of Sirmons and managed to redound to his best interest.
The debtor corporation was organized in 1955 and Sirmons owns 98 per cent of the stock. The corporation owes Sirmons over $147,000 secured by a mortgage or mortgages for money advanced by him. It is not shown that the dealings of the corporation were not entirely corporate. Neither is it shown that the creditor corporation dealt in anywise with Sirmons or relied on any representations made by him. There is no evidence tending to show that the creditor corporation has been victimized by fraud, or any transactions between Sirmons and the Sirmons Supply Company that were in bad faith or that the corporation was the alter ego of Sirmons, as in the case of Biscayne Realty & Ins. Co. v. Ostend Realty Co., 109 Fla. 1, 148 So. 560, and Third Ave Co. v. Keely, 111 Fla. 46, 149 So. 30.
As to piercing the veil of the corporate entity to reach a one-man stockholder, Wormser in his Disregard of the Corporate Fiction, p. 79, 81, 83 states:
"It is true that courts will be more apt to pierce the veil of corporate entity where one person owns all the corporate stock, but they do this in such cases not because it is a one-man company, not because there is but one shareholder, but because the other circumstances of the case make such action imperative. The writer submits that in practically every case of a one-man corporation where the veil of entity was brushed aside, the same result would have followed had there been a thousand stockholders, or ten thousand. The writer, although a firm believer in the necessity for a frequent and liberal disregard of the concept of corporate entity, believes that to ignore it simply because the number of stockholders has become very few, or even one, is to convert an otherwise sane, safe and sensible policy into a reductio ad absurdum; and so, to their credit, the majority of American courts have universally held.
"To reduce this proposition to the form of a rule: corporate entity will not be ignored at law or equity simply because the number of stockholders is few, or even one, unless the circumstances are such as would warrant the same disregard of the entity were there ten thousand shareholders. "
The corporate veil will not be pierced when it is not shown that the corporation was used to mislead creditors or for fraudulent purposes; without more, the mere fact that one or more individuals control the corporate activities is not sufficient to justify imposition of the corporate debt upon the shareholders of the corporation. Riley v. Fatt, Fla., 47 So.2d 769, Gross v. Cohen, Fla., 80 So.2d 360, Advertects, Inc. v. Sawyer Industries, Inc., 84 So.2d 21.
The judgment appealed is reversed without prejudice to further like proceedings.
ALLEN, Acting C. J., concurs and WHITE, J., concurs specially.