Opinion
Page __
__ Cal.App.2d __ 325 P.2d 1 MOTORES DE MEXICAL, S. A., a corporation of the United States of Mexico, Petitioner, v. The SUPERIOR COURT of the State of Califoria IN AND FOR COUNTY OF LOS ANGELES, Respondent. Erwin G. Resnick, William D. Cowan and R. William Cowan, Real Parties in Interest. Civ. 22930. California Court of Appeals, Second District, Second Division May 12, 1958Rehearing Denied June 6, 1958.
Hearing Granted July 9, 1958.
[325 P.2d 2] Utley & Houck, Los Angeles, for petitioner.
Geo. W. Rochester, La Hobra, for real parties in interest.
KINCAID, Justice pro tem.
Petitioner seeks an alternative writ of mandate requiring the respondent court to proceed with the trial of the issues joined by the petition for order to show cause why a certain judgment, initially rendered only against Erbel, Inc., a California corporation, individually and doing business under the fictitious name of Bi Rite Auto Sales, should not be corrected by adding the names of each of the real parties in interest as judgment debtors therein.
The respondent court has refused to hear the matter on its merits and has by minute order and otherwise announced its intention to dismiss said proceeding to add the names of the real parties in interest as judgment debtors to said previous judgment, solely on the ground that it does not have jurisdiction to hear and determine the proceeding on its merits or to do otherwise than to dismiss the proceeding. The hearing and trial have been continued by the respondent court in order to enable petitioner to file the petition for writ of mandate herein.
Another department of the respondent court had previously denied motions to dismiss and had ordered that the matter be transferred to the master calendar department of the respondent court for trial on the petition for said order to show cause and answers thereto; the issues to be tried to be limited to the petition and answers but otherwise the proceedings to be subject to the same rules of procedure including memorandum of setting and pretrial, as any plenary trial.
A summary of the relevant facts as alleged in the petition for order to show cause discloses that in early 1953 the petitioner sold certain used automobiles to the real parties in interest (hereinafter called: Resnick and the Cowans) who were doing business under the fictitious firm name of Bi Rite Auto Sales. However, as later alleged in said petition and as hereinafter set forth, petitioner did not then know and did not learn until long after it secured judgment against Erbel, Inc., that Resnick and the Cowans were in fact the persons who were engaged in doing business under the fictitious firm name of Bi Rite Auto Sales or that Erbel, Inc., was the alter ego of Resnick and the Cowans.
Petitioner was given certain bank drafts issued in the name of Bi Rite Auto Sales in the total sum of $26,447 in payment for said used automobiles; that said bank drafts were dishonored upon presentation; that, following the dishonor of such drafts, petitioner searched the appropriate public records and found certificate showing that a California corporation known as Erbel, Inc., was engaged in the automobile business and doing business under the fictitious name of Bi Rite Auto Sales; and that, acting in reliance thereon, petitioner filed complaint against said Erbel, Inc., individually and doing business as Bi Rite Auto Sales, to recover the amount owing on said unpaid drafts. On June 25, 1953, a judgment by default by clerk for the total sum of $27,151.48 was entered in favor of petitioner against said Erbel, Inc., a California corporation, individually and doing business under the fictitious name of Bi Rite Auto Sales. Certain payments in partial satisfaction were recovered by levy and from a trustee in bankruptcy. In the latter connection, it is alleged that, subsequent to the entry of the aforementioned judgment against it, Erbel, Inc., upon its voluntary petition was adjudicated a bankrupt; that petitioner filed creditor's claim and received certain partial payments or dividends; that the assets of said bankrupt estate have been wholly liquidated; [325 P.2d 3] and that there are no further funds or assets of Erbel, Inc., which can be applied in satisfaction of the unsatisfied balance which still remains owing upon petitioner's judgment.
With more specific reference to Resnick and the Cowans, said petition for the order to show cause further alleges in substance that, subsequent to the time when the said judgment so rendered against Erbel, Inc., became final, petitioner has discovered the facts with respect to and learned the true identity of the judgment debtors in said action and the identity of the persons who were in truth and in fact engaged in doing business as Bi Rite Auto Sales; and that said facts were so discovered in connection with various subsequent proceedings, including the case for Automotriz Del. Golfo De California S.A. De C. V. v. Resnick, 47 Cal.2d 792, 306 P.2d 1. That in truth and in fact it was Resnick and the Cowans who were engaged in the business of buying and selling used automobiles under the fictitious name of Bi Rite Auto Sales and they were so engaged as joint venturers pursuant to an oral agreement by which their profits to be realized from the operations of said business were to be divided 50 per cent to Resnick and 25 per cent to each of the Cowans.
It is further alleged that Erbel, Inc., was a mere instrumentality, adjunct and conduit designed and used by Resnick and the Cowans for the purpose of diverting all income and proceeds from said business to themselves as salaries, loan repayments and otherwise, and yet escaping personal liability for the obligations incurred in said business, including the obligation to pay petitioner the sums due under the bank drafts hereinabove mentioned.
A detailed recital of facts allegedly so showing that Erbel, Inc., was a mere instrumentality of and alter ego of Resnick and the Cowans is then set forth, the substance of said allegations being as follows: That Resnick and the Cowans were the sole officers and directors of Erbel, Inc., the sole owners of all financial interest in said corporation, and in full control and management of its affairs; that no stock was ever issued nor permit to issue stock ever applied for; that said corporation was deliberately inadequately capitalized; that Resnick and the Cowans paid to themselves from the income and proceeds of said business substantial sums as salaries, reimbursement for expenses and repayment of loans made by them, well knowing that such diversion of the funds of said business would inevitably force the corporation into bankruptcy; that Resnick and the Cowans caused title to various automobiles purchased in the operation of said business to be taken in the name of William D. Cowan and sold in the usual operation of said business without segregation from automobiles held by said business in its own name; that Resnick and the Cowans represented to persons dealing with said business, including petitioner, that they were individually responsible for the obligations of said business, that it was adequately capitalized, and that any drafts given for purchases on behalf of said business would be honored immediately upon presentation.
Finally, it is alleged in said petition for the order to show cause that, by reason of the matters set forth in said petition, Resnick and the Cowans were and are the alter egos of said Erbel, Inc.; that they were and are individually responsible for the drafts and obligations of the business conducted under the fictitious firm name of Bi Rite Auto Sales, including the obligation to pay petitioner the amounts remaining due on said bank drafts; and that Resnick and the Cowans were and are the proper persons to be identified as the judgment debtors in the judgment previously entered against Erbel, Inc., a California corporation, individually and doing business under a fictitious name of Bi Rite Auto Sales.
The real parties in interest have filed their return by way of answer to the foregoing petition.
The respondent court, acting pursuant to section 187 of the Code of Civil Procedure, adopted a suitable procedure for the [325 P.2d 4] purpose of determining whether Resnick and the Cowans were in fact the alter egos of Erbel, Inc., and as such, the real parties who should be bound by the judgment, the misnomer, if such should be so found, to be corrected. In event of such determination Resnick and the Cowans would be found to have been the real parties who were doing business as Bi Rite Auto Sales as the alter egos of Erbel, Inc. and carrying on the business under the latter name. As such they would be the real defendants and would be individually liable for the debts of Bi Rite Auto Sales due petitioner.
This procedure gave the real parties in interest the safeguards, rights and attributes of a plenary action, the basis of the rule being that the court, having acquired jurisdiction of the person of the defendant and the subject of the action, it necessarily possessed the power to correct a misnomer by ordering the judgment amended to correctly designate the parties actually involved. Mirabito v. San Francisco Dairy Co., 8 Cal.App.2d 54, 60, 47 P.2d 530.
The real parties in interest argue that this procedure constitutes in effect a denial to them of due process. Although they were allegedly the sole officers, directors and owners of all financial interest in Erbel, Inc. and one of them was served with the summons and complaint in the original action, they chose to ignore the charges therein contained and permitted default judgment to be taken. Had they been advised that they might be held liable individually they contend they would have had the privilege of not only denying the allegations as to their status as alter egos but could have raised any affirmative defense available to them. Not being apprised that there was any thought of holding them personally liable they say they were not obligated to make a defense on behalf of the corporation.
The real parties in interest were at all times in the best possible position to know whether or not they were using the corporate name as a front or instrumentality through which they were transacting their operations as a business convenience or for the purpose of deluding those with whom such business was being conducted. Knowing all the facts they could have caused their individual appearances to have been entered in the action and by proper pleadings, have asserted all relevant matters and defenses. Instead they chose to remain anonymous permitting the judgment against their alleged corporate front to go by default.
A somewhat similar factual situation was presented in Thomson v. L. C. Roney & Co., 112 Cal.App.2d 420, 246 P.2d 1017. Plaintiff had sued L. C. Roney & Co. on a business debt and recovered a judgment from which no appeal was taken. After the judgment had become final he learned, through supplementary proceedings, that said defendant had, at a time before his suit was instituted, sold out to the Southwestern Development Company which was owned and controlled by the same interests as the selling corporation. Plaintiff thereupon filed a petition for an order to show cause why the name of Southwestern Development Company, a corporation, should not be added to the judgment as a judgment debtor. The order to show cause was issue and attacked by writs of prohibition filed in both the District Court of Appeal and the Supreme Court. These petitions were denied. A hearing was held on the merits and, after evidence was taken and considered, plaintiff's petition was granted.
On appeal the validity of the order amending the earlier judgment was challenged on the ground (112 Cal.App.2d at page 425, 246 P.2d at page 1020): (1) 'the trial court acted in excess of its jurisdiction in adding the name of the Southewestern Development Company to a final judgment, and (2) no showing was made that would warrant a disregard of the separate corporate existence of L. C. Roney Inc., and support a finding that it was the alter ego of appellant.' In rejcting these contentions this court stated: 'The order here under consideration does not effect [325 P.2d 5] an enlargement of the original judgment nor is it a modification thereof to correct a supposed error of law. It is simply an amendment whose purpose is to designate the real name of the judgment debtor. (Citations.)'
And again at pages 426, 427 of 112 Cal.App.2d, at page 1020 of 246 P.2d: 'Appellant endeavors to distinguish the Mirabito case (Mirabito v. San Francisco Dairy Co., supra, 8 Cal.App.2d 54, 57, 47 P.2d 530), in which the relations between the two corporations were established during the trial and an express finding of an alter ego relationship made, by pointing out that in the original trial of the case at bar (1) no testimony was offered to indicate the existence of any relationship between appellant and L. C. Roney, Inc., and (2) no finding was made in the original proceeding that L. C. Roney, Inc., was appellant's alter ego. There is nothing in the language or the logic of the Mirabito decision which would limit its application solely to a situation where the connection between the two corporations is developed in the original trial. The limitation contended for by appellant would fetter the court's ability to do justice between the parties and award a premium to a litigant's capacity to conceal his real identity. The liberality with which a court permits amendments of judgments where the record itself clearly reflects a clerical error should apply equally to the use of extrinsic evidence to clarify the name of the real defendant. (Citations.) Where a court may with propriety amend a judgment, evidence dehors the record is admissible, upon proper notice to the adversary party, in order to make the judgment speak the truth. (Citation.) See Freeman on Judgments (5th Ed.), vol. 1, p. 939. Since the court had jurisdiction over the defendant, it had jurisdiction to make its judgment reflect the defendant's true name. (Citations.) A question having arisen as to the identity and character of the defendant upon whom the judgment was binding the court possessed the power to adopt a suitable procedure for the purpose of determining that question. Code Civ.Proc. sec. 187. Under the authority of this section the court properly exercised its power by taking evidence, after proper notice, in order to determine the true name of defendant.' It will readily be seen then that the procedure adopted by the trial court herein for the determination of the matters presented by the petition is not for the purpose of correcting any clerical error as such but for the purpose of ascertaining and designating the real name of the judgment debtor or debtors and amending the original judgment accordingly.
The real parties in interest and the respondent court further take the position that said court is without jurisdiction because the proceeding under the petition is in reality one to pierce the corporate veil of the judgment debtor corporation, Erbel, Inc. and to secure an adjudication that Resnick and the Cowans were in fact the alter egos of said corporation. This position ignores the additional allegations of the petition to the effect that the automobiles were sold to Resnick and the Cowans who were doing business under the fictitious firm name of Bi Rite Auto Sales; that it was Resnick and the Cowans who were engaged in the business of buying and selling used automobiles under the fictitious firm name of Bi Rite Auto Sales, and they were so engaged as joint venturers pursuant to an oral agreement; and that Resnick and the Cowans were and are individually responsible for the debts and obligations of the business conducted under the fictitious firm name of Bi Rite Auto Sales. Accordingly and without regard to the allegations that Erbel, Inc., was a mere instrumentality and that Resnick and the Cowans were its alter ego, there are direct and positive allegations stating in legal effect that Resnick and the Cowans were the true defendants and debtors and, in view of said allegations, it seems clear that there is no justification for the trial court's belief that the petition for the order to show cause solely and only sets forth a cause of action to pierce the corporate veil of Erbel, Inc. and to have it adjudicated that Resnick and the Cowans were the [325 P.2d 6] alter ego of Erbel, Inc. These allegations present all the elements necessary to justify piercing the corporate veil and establishing the alter ego relationship. Wilson v. Nobell, 119 Cal.App.2d 341, 348, 259 P.2d 720.
Furthermore, it was made clear in Thomson v. L. C. Roney & Co., supra, 112 Cal.App.2d 420, 246 P.2d 1017, that the trial court, on a petition for an order to show cause similar to the one herein, does have jurisdiction to hear and determine such matters. The court there stated (112 Cal.App.2d at pages 427, 428, 246 P.2d at page 1021): 'Where injustice would result from a strict adherence to the doctrine of separate corporate existence, a court will look behind the corporate structure to determine the identify of the party who should be charged with a corporation's liability. (Citation.) Since the separate personality of a corporation is but a statutory privilege it must not be employed as a cloak for the evasion of obligations. The conditions which must be present before the corporate veil will be pierced are outlined in Minifie v. Rowley, 187 Cal. 481, 487, 202 P. 673, 676, where the court points out that before the obligations of a corporation can be regarded as those of another person, the following circumstances must appear: 'First, that the corporation is not only influenced and governed by that person, but that there is such a unity of interest and ownership that the individuality, or separateness, of the said person and corporation has ceased; second, that the facts are such that an adherence to the fiction of the separate existence of the corporation would, under the particular circumstances, sanction a fraud or promote injustice.' The second requirement suggested in Minifie v. Rowley, supra, is further refined in the following expression: '* * * where the recognition of the fiction of separate corporate existence would foster an injustice or further a fraud the courts will refuse to recognize it. (Citing cases.) It is not necessary that the plaintiff prove actual fraud. It is enough if the recognition of the two entities as separate would result in an injustice. (Citing cases.) Here confusion would be promoted and an unjust result be accomplished if the maintenance of the two entities controlled by the same persons and having an identical name were permitted to frustrate a meritorious claim.' Gordon v. Aztec Brewing Co., 33 Cal.2d 514, 522-523, 203 P.2d 522, 527.'
A suitable procedure having been established for hearing and determining the issues presented by the petition and the answers thereto, the trial court should proceed to take evidence for this purpose. Petitioner is entitled to have these matters determined and if the allegations of the petition are properly established the alter ego corporate identity of the real parties in interest will be disregarded and the judgment corrected to include them as judgment debtors, the court having full jurisdiction to grant that relief.
Let a writ of mandate issue directing the respondent court to proceed in accordance with the views expressed herein.
HERNDON, J., concurs.
ASHBURN, Acting Presiding Justice (dissenting).
I cannot concur in the judgment because I think it denies due process to the real parties in interest, namely, Erwin G. Resnick, William D. Cowan and R. William Cowan. The prevailing opinion holds that although they were not made parties to the action which resulted in a default judgment against the corporation, Erbel, Inc. (the only party-defendant to the action), they can be brought into the case to answer to a judgment already rendered against the corporation, and that this can be done under the guise of correcting the record to show the true names of the judgment debtors. In my opinion this is neither due process of law nor do the cases upon which petitioner relies support such a ruling.
On June 9, 1953, Motores de Mexicali, S. A., a Mexican corporation, filed an action in the superior court of Los Angeles County for recovery upon six automobile [325 P.2d 7] purchase drafts executed by defendant Erobel, Inc., under its fictitious name, Bi Rite Auto Sales, and delivered by defendant Erbel, Inc., to plaintiff; the complaint alleged that Erbel, Inc., was doing business under the fictitious name, Bi Rite Auto Sales. Erbel, Inc., was the only defendant named in the complaint. It was served by delivery of summons and complaint to its president, William D. Cowan, one of the real parties in interest herein. No service was made upon him in his personal capacity and neither of the other real parties in interest, Erwin G. Resnick or R. William Cowan, was served. Defendant Erbel, Inc., defaulted and default judgment was rendered against it, 'individually and doing business under the fictitious name of Bi Rite Auto Sales' in the sum of $26,900.83, plus interest and costs. Soon Erbel, Inc., went into bankruptcy and turned over its assets to the trustee in bankruptcy. Motores de Mexicali, S. A., filed a claim on the judgment and received by way of dividends from the bankruptcy estate $1,765.45, plus $4,617.81. It had attached defendant's place of business, stock of secondhand automobiles, etc., when the action was started, and by that means collected $240.60 from the sheriff. The bankruptcy estate is exhausted and there is an unpaid balance of over $26,000 owing upon the judgment.
On March 6, 1957, Motores de Mexicali, S. A., filed in the superior court a petition for an order to show cause 'why said judgment of June 25, 1953 should not be corrected by adding the names of each of the respondents [Resnick, William D. Cowan and R. William Cowan] as judgment debtors therein.' The judgment had long since become final.
The petition for the order to show cause says, among other things, that 'plaintiff sold certain used automobiles to Erwin G. Resnick, William D. Cowan and R. William Cowan, who were then and there doing business * * * under the fictitious name of Bi Rite Auto Sales;' also that said individuals represented to plaintiff 'that they were individually responsible for the obligations of said business, that it was adequately capitalized, and that any drafts given for purchases on behalf of said business would be honored immediately upon presentation.' These allegations, read together, show sales to the individuals and the incurring of a primary liability for the purchase price on their part. See Kilbride v. Moss, 113 Cal. 432, 435, 45 P. 812; Russ Lumber & Mill Co. v. People's Trust & Savings Bank, 76 Cal.App. 438, 244 P. 934; 24 Am.Jur. § 3, p. 874. The petition also alleges: 'The respondents caused title to certain of the automobiles purchased in the operations of said business to be taken in the name of respondent William D. Cowan, and such titles were held by him until said business acquired funds to pay for said automobiles. In the meantime the automobiles so purchased were reconditioned, shown, and sold in the usual operation of said business without segregation from automobiles held by said business in its own name.' A pretrial statement signed by the attorneys for petitioner in the instant proceeding says: 'The proof will show that it [Motores] was relying upon the credit of respondent W. P. Cowan, and was told that he was individually behind Bi-Rite Auto Sales.' When the drafts were dishonored and before filing suit petitioner's attorneys checked the public record of fictitious firm name certificates, found the one filed by Erbel, Inc. and elected to sue it rather than the individuals upon whose credit Motores had relied.
It seems to me that this proceeding is governed by cases such as Burlingame v. Justice's Court, 1 Cal.2d 71, 33 P.2d 669, 670. In that instance plaintiff Kaufman sued O. A. Burlingame and wife and named no other defendant. He did, however, deliver a copy of summons and complaint to R. A. Burlingame, the son of the named defendants. After judgment had been rendered by default against O. A. Burlingame plaintiff sought to substitute R. A. Burlingame as the judgment debtor, although he had not been named as a defendant and had not appeared in the action. The justice's court made an order of substitution and the [325 P.2d 8] superior court annulled it. On appeal from the last mentioned order appellant insisted 'that what the justice's court really did was to make an order 'correcting the record so as to make it speak the truth,' and that therefore the order was valid.' 1 Cal.2d at page 73, 33 P.2d at page 670. The argument was rejected in these words: 'The answer to the appellant's position is that it was alleged in the petition and is therefore admitted that the order of substitution was one substituting R. A. Burlingame 'as the judgment debtor in the place and stead of the defendant in said action, O. A. Burlingame, the father of your petitioner.' The appellant is bound by that allegation and the order must be deemed void. This is not an action where R. A. Burlingame was sued under a false or fictitious name or has been sued by an inaccurate designation of his own name; but it is an action wherein he was never sued at all, was not sought to be sued and no attempt was made to bring him into the case until long after the entry of the judgment, which, so far as the record discloses, has never been set aside.' 1 Cal.2d at page 73, 33 P.2d at page 670. The order of the superior court was affirmed.
Chapman v. Western Irrigation Co., 75 Kan. 765, 90 P. 284, involved a motion to substitute Western Irrigation Company as the debtor upon a judgment rendered against Western Irrigation & Land Company. In affirming a denial of the motion the court said, 90 P. at page 285:
'The court rightly refused to substitute one defendant for another in the judgment in this summary way * * *. As will be observed, it is not a case of misnomer, or defective designation, but a proposed substitution of defendants more than five years after the judgment had been rendered. It was not a correction of a clerical error, nor to make the judgment conform to one actually rendered, but, under the name of an amendment, the court was asked to introduce the name of a new defendant into the judgment in lieu of the one against whom the judgment was actually rendered. * * * Here there was no confusion of names nor inadvertence in rendering the judgment against the Land Company. * * * The Irrigation Company was not name a party to the action, no cause of action was alleged against it, nor was there ever any purpose of rendering a judgment against that company. The judgment pronounced was within the pleadings of the case, and just such a judgment as the court was asked to render. Plaintiff is asking to have the judgment corrected so as to make it show what she thinks should have been done but which in fact was not done, and this in a summary way, five years after the expiration of the term at which the judgment was rendered.
'She contends that the Land Company is a creature of the Irrigation Company, and that the latter is masquarading in the name of the former. * * * In general terms, the plaintiff alleged that the Irrigation Company was fraudulently wearing the cloak of the Land Company, but, if fraud is to be made the basis of relief, and a liability established against a new defendant, it should be fully pleaded and issues directly tendered in a proper action. It cannot be summarily accomplished on a motion to amend a judgment rendered against another party.'
The effect of granting the motion now under consideration would be to foreclose these individuals from advancing any defense or offset that they may have had, or thought they had, to the original action. It would confine the trial to a canvassing of the issue of alter ego, the question of whether defendants should be held individually liable upon a judgment already rendered in their absence. That would be a denial of due process of law.
It is of the essence of due process that one charged with liability in a judicial proceeding shall have notice of the claim against him and an opportunity to refute it with evidence. Follette v. Pacific Light & Power Corp., 189 Cal. 193, 203, 208 P.
[325 P.2d 9] 295, 23 A.L.R. 965; Matter of Lambert, 134 Cal. 626, 634, 66 P. 851; 55 L.R.A. 856; People v. Lawrence, 140 Cal.App.2d 133, 137, 295 P.2d 4; 11 Cal.Jur.2d § 313, p. 788. 'The notice essential to due course and process of law is the original notice whereby the court acquires jurisdiction, and is not notice of the time when jurisdiction, already completely vested, will be exercised.' Gray v. Hall, 203 Cal. 306, 318, 265 P. 246, 253.
The law seems well settled to the effect that a new party cannot be added to a judgment by motion to amend it; that the farthest reach of such a motion is to bring within the record of the judgment persons who are actually bound by it but not named therein as judgment debtors. Cases upon which petitioner relies are in that category.
Mirabito v. San Francisco Dairy Co., 8 Cal.App.2d 54, 47 P.2d 530, is one of them. It was a personal injury action brought against San Francisco Dairy Company, based on negligence of one Vogel who was alleged to be employed by said company. Before the accident San Francisco Dairy Company had conveyed all its assets to Dairy Delivery Company, Inc., which continued to transact part of its business in the name of San Francisco Dairy Company. The defense to the action was conducted by Dairy Delivery Company, Inc., in the name of San Francisco Dairy Company. The question of alter ego was raised and canvassed at the trial; that claim was sustained both in the trial court and on appeal where the judgment was affirmed. The judgment ran against Vogel and San Francisco Dairy Company. After it became final plaintiff made a motion to add Dairy Delivery Company, Inc., as a judgment debtor; the motion was granted and the judgment was amended accordingly. Upon appeal from an order refusing to vacate the last mentioned order it was held that the amendment was proper as a correction made to show the true name of the judgment debtor. It is to be noted that Dairy Delivery Company, Inc., had been present throughout, conducting the defense to the action through attorneys who represented both corporations and that it bore such portion of the expense as exceeded San Francisco Dairy Company's ability to pay; that the issue of alter ego was there decided against Dairy Delivery Company, Inc. The judgment had omitted its name and was corrected to show the identity of the real defendant. At page 60 of 8 Cal.App.2d, at page 532 of 47 P.2d the court said: 'The rule has long been declared in California that where the facts warrant, courts may amend pleadings to correctly designate the parties actually involved, even though the statute of limitations has run in favor of the party substituted. Thompson v. Southern Pacific Co., 180 Cal. 730, 183 P. 153; Smith v. Pickwick Stages System, supra [113 Cal.App. 118, 297 P. 940]; Walsh v. Decoto, 49 Cal.App. 737, 740, 194 P. 298. The basis of the rule is, of course, that the court having acquired jurisdiction of the person of the defendant and of the subject of the action, it necessarily possessed the power to correct a misnomer. In the cases last mentioned, it is true, no judgment had been rendered at the time of the amendment. Where, however, as here, the Supreme Court has stated the evidence is sufficient to warrant the conclusion that in effect that two corporations are identical; where, as here, the action was fully and fairly tried with at least the direct financial assistance of appellant; and where, as here, nothing appears in the record to show that Dairy Delivery Company could have produced a scintilla of evidence that would have in any way affected the results of the trial, there is no basis for a different rule.' It then distinguished the Burlingame and Chapman cases, supra, saying: 'The Supreme Court, having heretofore declared San Francisco Dairy Company to be merely thealter ego of appellant, the cases of Burlingame v. Justice's Court, 1 Cal.2d 71, 33 P.2d 669; Chapman v. Western Irr. Co., 75 Kan. 765, 90 P. 284, and Walters v. Dock Commission of City of Portland, 126 Or. 487, 245 P. 1117, 266 P. 634, 270 P. 778, upon which appellant relies, may be readily distinguished from the instant case, [325 P.2d 10] and the principles therein declared are not applicable herein.' This language implies recognition of the rule that a new party cannot be charged with liability through an amendment to the judgment.
Thomson v. L. C. Roney & Co., 112 Cal.App.2d 420, 246 P.2d 1017, decided by this court, advances one step beyond Mirabito. It upheld an amendment adding the name of the real defendant to the judgment although the alter ego issue was not developed until motion to amend was made after judgment had become final. But it was the real defendant that was added, and that was a corporation which had actually conducted the defense at the trial. At page 429 of 112 Cal.App.2d, at page 1022 of 246 P.2d: 'Further, the attorney for both corporations was the same, and though the complaint was brought against L. C. Roney, Inc., the litigation was in effect carried through and subsidized by appellant corporation, which at all times was fully apprised and cognizant of plaintiff's claim and of the legal action it had taken against L. C. Roney, Inc.' The ruling was based upon the power of the court to amend its record to show the true fact, the real name of the judgment debtor. 'It is simply an amendment whose purpose is to designate the real name of the judgment debtor.' 112 Cal.App.2d at page 425, 246 P.2d at page 1020.
It is possible to follow and accept the reasoning of Mirabito and Thomson cases, supra, for they merely add to the judgment the name of the corporation which actually conducted the defense and was heard upon the question of liability upon the alleged cause of action. But it does not follow that those decisions sanction the addition to the judgment debtor in a default judgment the names of other who were not parties, were not served as such, and who did not appear or otherwise conduct a defense of the action.
These individual real parties in interest well may have concluded that there were good defenses or offsets to the drafts but, as the corporation was insolvent, it would be advisable to wash out all its actual or possible liabilities through the bankruptcy court. Had they then known that claim of individual liability was to be made against them and that they could be brought into the action by indirection, they presumably would have advanced those suppositious defenses and perhaps have defeated the action. It seems to be immaterial whether they actually had any such defenses, for the requirements of due process strike deeper than the mere ad hominem arguments which petitioner presents to sustain its position. This case should be governed by Burlingame v. Justice's Court, supra, 1 Cal.2d 71, 33 P.2d 669.
In my opinion the writ should be denied.