Opal Mercantile v. Tamblyn

Supreme Court of Wyoming · 1980 · Corporations

616 P.2d 776 (1980)

Updated August 22, 2026

CorporationsPiercing the corporate veilcorporate entitysole shareholderpersonal liabilitypublic policyends of justicefraud

Facts

Opal Mercantile's claims arose from three insufficient-fund checks drawn by Westside and three open-account debts. Tamblyn was Westside's sole director, officer, and stockholder, and Opal Mercantile argued that Westside's corporate entity should be disregarded so Tamblyn would be personally liable. The trial court found that Opal Mercantile, acting through Frank Sears, knew or should have known it was dealing with Westside as a corporation, knew Westside was in financial trouble, knew the three checks would not clear when issued and agreed to hold them, and did not obtain Tamblyn's personal guarantee. Sears also testified that he did not believe Tamblyn was dishonest, and the trial court found no showing of bad faith.

Issue

Whether the court should disregard Westside's separate corporate existence and hold Tamblyn personally liable for Westside's debts. More specifically, did the facts require veil piercing in furtherance of public policy or the ends of justice?

Rule

Ordinarily, a corporation is a separate entity distinct from the individuals comprising it, even if all or most of the stock is owned by one person. The separate entity doctrine may be disregarded in an appropriate case and in furtherance of public policy or the ends of justice, but whether to do so depends on the special facts of the case. Appellate courts defer to trial-court fact findings unless they are clearly erroneous or against the great weight of the evidence.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Cheyenne, Laramie Valley Ag Supply extended trade credit to Red Butte Equipment, Inc., a farm-parts dealer. Red Butte later defaulted, and the supplier sues Nolan Price personally because he was the corporation's only shareholder, only director, and managed every aspect of the business.

Which is the strongest argument against holding Nolan personally liable on these facts alone?

Explanation. The majority treated corporate separateness as the default rule, even when all or most of the stock is owned by one individual. The court refused to impose personal liability merely because one person was the sole shareholder, officer, and director. Veil piercing requires an appropriate case in furtherance of public policy or the ends of justice, not just sole ownership.