decided: October 28, 1988.
JAMES H. SWEENEY, JR., APPELLANT
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF TRANSPORTATION, APPELLEE
Appeal from the Order of the Court of Common Pleas of Delaware County in the case of Commonwealth of Pennsylvania, Department of Transportation v. James H. Sweeney, No. 87-11101.
F. Michael Friedman, Arney, Pagano & Friedman, for appellant.
Donald H. Poorman, Assistant Counsel, with him, Harold H. Cramer, Assistant Chief Counsel, and John L. Heaton, Chief Counsel, for appellee.
President Judge Crumlish, Jr., Judge Colins, and Senior Judge Blatt, sitting as a panel of three. Opinion by President Judge Crumlish, Jr. This decision was reached prior to the resignation of Judge MacPhail.
[ 120 Pa. Commw. Page 592]
The Commonwealth Department of Transportation, Bureau of Driver Licensing (Department) suspended James H. Sweeney's operator's license for failure to maintain financial responsibility. Section 1785 of the Motor Vehicle Financial Responsibility Law (Act).*fn1 After de novo review, the Delaware County Common Pleas Court upheld the suspension. Sweeney appeals; we vacate and remand.*fn2
Sweeney was the operator of a vehicle involved in a reportable accident.*fn3 During the site investigation,
[ 120 Pa. Commw. Page 593]
Sweeney produced a driver's license and registration but no insurance information. The car was uninsured*fn4 and registered to J.J. Sweeney Company, a corporation whose president and sole shareholder was Sweeney. The registration indicated the corporation's address was the same as Sweeney's home address.
The trial court dismissed Sweeney's subsequent license suspension appeal, declaring him the vehicle's owner under Section 1785 of the Act.*fn5
Sweeney initially contends that as a shareholder of a corporation, he is not owner of its assets. Meitner v. State Real Estate Commission, 1 Pa. Commonwealth Ct. 426, 275 A.2d 417 (1971). Thus, even as the sole shareholder, he contends he does not own or have property
[ 120 Pa. Commw. Page 594]
rights in the uninsured vehicle. The Department counters that for purposes of Section 1785, the corporate entity was properly disregarded by the common pleas court.
We have held that a corporation is an independent entity even where stock ownership is entirely vested in one individual. Kaites v. Department of Environmental Resources, 108 Pa. Commonwealth Ct. 267, 273, 529 A.2d 1148, 1150 (1987). Although a strong presumption exists against piercing the "corporate veil," Wedner Unemployment Compensation Case, 449 Pa. 460, 296 A.2d 792 (1972), this Court has stated several factors which justify disregarding the corporate entity. Of particular importance are undercapitalization, intermingling of corporate and personal affairs and use of the corporate form to perpetrate fraud. Kaites, 108 Pa. Commonwealth Ct. at 273, 529 A.2d at 1151. Moreover, it has been said that the fiction of a separate legal identity will not stand where the corporation exists to avoid the incorporator's present obligations, Rinck v. Rinck, 363 Pa. Superior Ct. 593, 596, 526 A.2d 1221, 1222 (1987), or where justice or public policy demand. Cerami v. Dignazio, 283 Pa. Superior Ct. 424, 442, 424 A.2d 881, 890 (1980).
Thus, to pierce the corporate veil there must be some proof of activity or plan which vitiates the corporate purpose. In this case, the common pleas court's pertinent findings were: "(1) The Defendant's home address and the address of J.J. Sweeney Company are the same; (2) The Defendant is the president of J.J. Sweeney Company; and (3) The Defendant is the owner of one hundred percent of the stock of J.J. Sweeney Company." Based on these findings, the court concluded that Sweeney was the owner of the vehicle for Section 1785 purposes.
We find that these factors, while persuasive support for the common pleas court's conclusion, are not determinative.
[ 120 Pa. Commw. Page 595]
A crucial issue is whether the uninsured vehicle was in fact a corporate asset used primarily for business or whether Sweeney used the corporate identity to avoid his own obligations. Therefore, we remand this matter, Bender v. Commonwealth, 103 Pa. Commonwealth Ct. 485, 520 A.2d 919 (1987), and direct the common pleas court to make findings and a determination on this issue.
Finally, we dismiss Sweeney's contention that the common pleas court improperly assumed the role of advocate during the proceedings. The hearing transcript discloses that the judge's questioning was motivated by a desire to know the facts. Since the court allowed Sweeney's counsel the opportunity to ask him additional questions, Sweeney's due process rights were not violated. It is the "trial court's inherent right to question a witness so as to clarify existing facts and elicit new information where necessary." Commonwealth v. Stamm, 286 Pa. Superior Ct. 409, 417, 429 A.2d 4, 7-8 (1981).
We vacate and remand.
The order of the Delaware County Common Pleas Court, No. 87-11101 dated November 30, 1987, is vacated, and this case is remanded for further findings consistent with this opinion.
This decision was reached prior to the resignation of Judge MacPhail.
Vacated and remanded.