Walkovszky v. Carlton

18 N.Y.2d 414, 276 N.Y.S.2d 585, 223 N.E.2d 6 (1966)

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Nature of the Case

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Facts

P was severely injured four years ago when he was run down by a taxicab owned by Seon Cab Corp. (D) and negligently operated by Marchese (D). The individual Carlton (D) is a stockholder of 10 corporations including Seon, each of which has two cabs and each cab has only limited insurance ($10,000). Although independent of one another, these corporations are allegedly operated as a single entity with regard to financing, supplies, repairs, employees and garaging and are all named as defendants. P also asserts that he can hold the stockholders personally liable because a multiple corporate structure is an unlawful attempt to defraud the general public. D moved to dismiss the complaint on the ground that as to him it 'fails to state a cause of action.' The court at Special Term granted the motion but the Appellate Division, by a divided vote, reversed, holding that a valid cause of action was sufficiently stated. D Carlton appealed.