Court Opinion

ID: 9447888
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:46:47.979584+00
Date Added: 2024-06-11T17:31:13.473864
License: Public Domain

WHITAKER, Judge
(dissenting).
Plaintiff chose to carry on his activities through the instrumentalities of several corporations. He created new persons to carry on his work for him. The particular person with whose business activities we are concerned in this case was not plaintiff, in the eyes of the law, but a different person, separate and distinct from plaintiff. However difficult it may be, rationally, to divorce one entity from the other, the law has created the fiction of two entities, separate one from the other.
Having availed himself of this fiction, plaintiff is entitled to its advantages, and is subject to all its disadvantages. Hence, the loan by plaintiff to the corporation was from one person to another person. But, can we say that the loan was made in the carrying on of plaintiff’s business ? It was made to assist the corporation in carrying on its business, not plaintiff’s. Since plaintiff elected not to carry on the business himself, but to have another person do it for him, then his loan to this person was a loan to and for the benefit of someone other than himself.
It was a loan to his agent, it is true, but it was one for which the agent was liable to plaintiff, because it was a loan in carrying on the agent’s business. Had it been an advance by plaintiff to his agent to carry on plaintiff’s business, the agent would not have been obligated to repay it.
Consequently, the loan could be taken, into account as a bad debt incurred in plaintiff’s business only if we completely disregard the separate corporate entity. Plaintiff, by his own creation of the corporation, elected to have it treated as a separate entity. So treating it, its business was not plaintiff’s business.
This is not an easy case, but I think plaintiff must remain on the horns of the dilemma he himself has created.