The fiction of a corporation as an entity distinct from the aggregate of individuals comprising it was designed to serve convenience and justice. There is consequently an exception recognized wherever the rule is known, namely that the fiction will be disregarded and the individuals and corporation considered as identical whenever justice or public policy demand it and when the rights of innocent parties are not prejudiced thereby nor the theory of corporate entity made useless. * * * A court of equity does not take a skindeep view of a situation like that here presented. It looks to the substance of the transaction, not to its mere form or color * * * and sees things as ordinary men do."
Again, in Edirose Silk Mfg. Co. v. First National Bank & Trust Co., 338 Pa. 139, 12 A.2d 40, 42, the Supreme Court of Pennsylvania stated: "In an appropriate case * * * this court will not hesitate to treat as identical the corporation and the individual or individuals owning all its stock and assets."
See also Great Oak B. & L.A. et al. v. Rosenheim, 341 Pa. 132, 136, 19 A.2d 95, which cites with approval these cases.
Section 3477 of the Revised Statutes is designed to protect the United States of America against conditions which do not appear to exist in this case. As was clearly stated in the leading early case of Goodman v. Niblack, 102 U.S. 556, 560, 26 L. Ed. 229, the Supreme Court of the United States pointed out that the mischiefs designed to be remedied by Section 3477 were mainly two: "First, The danger that the rights of the government might be embarrassed by having to deal with several persons instead of one, and by the introduction of a party who was a stranger to the original transaction. Second, That by a transfer of such a claim against the government to one or more persons not originally interested in it, the way might be conveniently opened to such improper influences in prosecuting the claim before the departments, the courts, or the Congress, as desperate cases, when the reward is contingent on success, so often suggest."
In the case of Kingan & Co. v. United States, Ct.Cl., 44 F.2d 447, it was held that where there had been a consolidation of two corporations, action could be brought in the name of the reorganized company on the assignment of the claim against the United States, and that the provisions of Section 3477 did not apply. The court in its opinion stated (44 F.2d page 450):
"It has frequently been held that the section in question does not include transfers by operation of law, or by will, in bankruptcy, or insolvency. Butler v. Goreley, 146 U.S. 303, 13 S. Ct. 84, 36 L. Ed. 981. The mischiefs designed to be remedied by this provision were declared in Goodman v. Niblack, 102 U.S. 556, 26 L. Ed. 229, to be mainly two * * *.
"And in Seaboard Airline Ry. v. United States, 256 U.S. 655, 41 S. Ct. 611, 612, 65 L. Ed. 1149, in which the facts disclosed that the plaintiff, by authorized union with other companies, became a consolidated corporation, and by reason of such consolidation fell heir to a claim against the United States for certain transportation services originally payable to one of the companies entering into the consolidation, the government contended that the plaintiff could not maintain the action because of section 3477, Revised Statutes (31 U.S.C.A. § 203). The Supreme Court, stating that this section of the statutes was intended to prevent frauds upon the Treasury, reiterated the mischiefs designed to be remedied stated in the previous cases, and said: 'We cannot believe that Congress intended to discourage, hinder or obstruct the orderly merger or consolidation of corporations as the various states might authorize for the public interest. There is no probability that the United States could suffer injury in respect of outstanding claims from such union of interests and certainly the result would not be more deleterious than would follow their passing to heirs, devisees, assignees in bankruptcy, or receivers, all of which changes of ownership have been declared without the ambit of the statute. The same principle which required the exceptions heretofore approved applies here.'"
In Martin v. National Surety Co., 300 U.S. 588, page 594, 57 S. Ct. 531, page 534, 81 L. Ed. 822, the Supreme Court of the United States sustained the validity of a payment of a claim against the United States despite failure to comply with the provisions of R.S. Sec. 3477, stating: "The provisions of the statute making void an assignment or power of attorney by a Government contractor are for the protection of the Government. * * *"
And on page 596 of 300 U.S., page 534 of 57 S. Ct., 81 L. Ed. 822: "The advocates of literalism find color of support in a line of decisions made in very different circumstances from these, but tending nonetheless to a strict construction of the statute. * * * Another line of cases exhibit an opposing tendency. * * * These cases teach us that the statute must be interpreted in the light of its purpose to give protection to the Government." (Emphasis supplied.)
Obviously, in this case, the government has to deal with only one real party in interest and cannot possibly be subjected to any claim by any other source. Substantial justice requires that the motion to dismiss be denied, and accordingly the motion is denied and leave is granted to the plaintiff to file an amended complaint within twenty days from the date of the filing of this opinion, and upon failure to file such amended complaint within the time stated the motion to dismiss will be granted.
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