Opinion
No. 21585.
April 2, 1951.
APPEAL FROM THE JACKSON CIRCUIT COURT, JACKSON COUNTY, JAMES W. BROADDUS, J.
J.K. Owens, Kansas City, for appellants.
Tyre W. Burton, Frank Iuen, Jefferson City, Ludwick Graves, Johnson, Lucas, Graves Fane, Kansas City, for respondent.
This is an injunction suit, instituted by general counsel of the Missouri Public Service Commission upon the order of the Commission, relator, to enforce a cease and desist order entered by relator against Joseph C. Cirese, one of the respondents herein. East Side Realty Company, a corporation, is also joined as respondent on the theory that it was organized at the instance of Cirese, and is his alter ego, to carry on the activities which Cirese had been ordered to cease and desist from doing. The judgment was for relator. Respondents, Joseph C. Cirese and East Side Realty Company, a corporation, were perpetually enjoined from selling, or soliciting the sale of electric energy to persons other than their own tenants, and from owning, managing or operating a plant producing electric energy for distribution of sale to others than their own tenants.
In 1940 relator conducted a hearing for the purpose of determining the nature of the business being operated by Joseph C. Cirese. Relator found that he owned several apartment houses and other properties and maintained a power plant and electric distribution lines devoted to the production and distribution of electric energy to tenants of his own properties, and to tenants of other properties not owned by him, and was, to the extent that he sold electric energy to others, operating a utility within the meaning of the law, and without having applied for or obtained a certificate of convenience and necessity. It was ordered that Joseph C. Cirese cease and desist from such distribution and sale of electrical energy. See State ex rel. and to use of Cirese v. Public Service Commission of Missouri, Mo.App., 178 S.W.2d 788.
The above hearing was completed and the order and decision of relator was entered November 18, 1940. Respondent sought and obtained a review of said order in the circuit court of Cole County, which court upheld its validity. Respondent appealed that decision to this court. We affirmed the judgment of the circuit court January 31, 1944, and on March 6, 1944, overruled motion for rehearing. Certiorari to the Supreme Court was sought but, on May 2, 1944, it was denied.
However, on April 27, 1944, a certificate of incorporation was issued to the East Side Realty Company, to which M. J. Cirese, son of respondent, Joseph C. Cirese, paid $2,600 of the $3,000 cash it received from the sale of stock. He became, and has since been, the managing officer of said corporation.
Immediately thereafter Joseph C. Cirese sold to the corporation for the sum of $3,000, his power plant and distribution lines, the method of operation of which is the subject of this litigation. It was in evidence, at the hearing before relator, that Cirese had solicited a sale of his plant to Kansas City Power Light Company, for $50,000.
On May 12, 1944, Joseph C. Cirese leased several of his properties to the corporation, authorizing it to manage same, collect rentals, make repairs, etc., to pay all expenses, including that for electrical energy furnished through this power plant. The corporation was to receive, for its services, 25% of the net returns therefrom.
Michael J. Cirese testified to the effect that the corporation has continued to operate the plant from the date of the sale about as it was previously operated, to service the Cirese properties and tenants, and to service some 20 other properties not owned or controlled either by the corporation or by Joseph C. Cirese. The uncontradicted evidence in this case is to the effect that the plant has never ceased to operate, since relator rendered its decision and order, in the same method and manner in which it was operated prior thereto.
It is not contended that respondent Cirese ever complied with the order and decision of relator November 18, 1940; and it is conceded that no court ever ordered or granted a "stay" of the operation of said order. In such circumstances respondent, Cirese, continued to operate, after the order was entered until, at least, May, 1944, in open defiance of the order of relator.
However, respondent East Side Realty Company contends that, since it is a corporation, and since it purchased the plant after the date of the hearing and order, it is not bound thereby; that the order and decision of relator, as to it, are of no force; that it cannot be regulated until relator has a hearing on a complaint as to the corporation. The order was a matter of public knowledge because of the records of the Commission, of the Cole County circuit court, and of this court. The managing officer of the corporation helped to build the plant and the lines, and was the manager of it prior to the hearing held by relator. He owns virtually all of the stock of the corporation. He testified as a witness in the hearing before relator. Respondent, Cirese, will not be permitted to escape the effect of the cease and desist order by using a corporation as a means of accomplishing a fraud on the court or to continue to perpetuate an illegal act. State on inf. of McKittrick v. Koon, 356 Mo. 284, 201 S.W.2d 446, 455; Ruckels v. Pryor, 351 Mo. 819, 174 S.W.2d 185, 199. In view of the record in this case, herein recited, it is too plain for further comment that the corporation is but the tool of Joseph C. Cirese and Michael J. Cirese, created for the express purpose of doing, through it, what they had been prohibited from doing four years before.
The judgment should be affirmed.
BOUR, C., concurs.
The foregoing opinion of SPERRY, C., is adopted as the opinion of the court. The judgment is affirmed.
DEW, P. J., and CAVE, J., concur.
BROADDUS, J., not sitting.