E. A. GRAHAM, W. R. BURTON, S. E. LIVINGSTON, H. R. PRIDGEN, R. F. TATUM, CARL DEDEN, J. B. TOWER, AND M. C. HARDEE, AS INDIVIDUALS AND AS COPARTNERS DOING BUSINESS UNDER THE FIRM NAME AND STYLE OF THE WHITE ROCK QUARRY COMPANY, PLAINTIFFS IN ERROR,
v.
JOHN SEWELL AND W. S. MORROW, AS COPARTNERS, DOING BUSINESS UNDER THE FIRM NAME AND STYLE OF JOHN SEWELL DYNAMITE COMPANY, DEFENDANTS IN ERROR
AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.
The Florida Supreme Court reversed a joint judgment against stockholders of a defectively formed corporation who were sued as a partnership. The court held that when stockholders lack statutory compliance for corporate formation, they are liable as partners under common law rules, which do not impose joint liability on all partners for all debts unless they were partners at the time each debt was incurred.
All defendants cannot be held jointly liable for all partnership debts under common law partnership rules. Each partner is liable only for debts incurred while he was a partner, and absent special agreement or circumstances imposing joint liability, partnership liability is not joint. The judgment was therefore erroneous to the extent it imposed joint liability on defendants who were not stockholders when particular debts were incurred.
“the stockholders shall be personally liable for all the corporate debts as if they were members of a general partnership and not stockholders of a corporation.”
Establishes the statutory basis for imposing partnership liability on stockholders of defectively formed corporations.
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceThe White Rock Quarry Company was formed as a corporation but failed to comply with statutory requirements regarding filing duplicate affidavits showi…
The full statement of facts, procedural history, and disposition for this case are member content.
Join FLexlaw to unlock all legal intelligence© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.
Explore caselaw by topic → Browse Money Lent cases and more on FLexlaw
Whitfield, J.
The declaration herein is as follows:
“John Sewell and W. S. Morrow, as copartners doing BUSINESS UNDER THE FIRM NAME AND STYLE OF JOHN Sewell Dynamite Company, Plaintiffs, v. E. A. Graham, W. R. Burton, S. E. Livingston, H. R. Pridgen, R. F. Tatum, Carl Deden, J. B. Tower and M. C. Hardee, as individuals and as copartners doing BUSINESS UNDER THE FIRM NAME AND STYLE OF THE White Rock Quarry Company, Defendants.
“Now comes the plaintiff in the above styled and entitled cause and sues the defendants E. A. Graham, W. E. Burton, S. E. Livingston, H. E. Pridgen, E. F. Tatum, Carl Deden, J. B. Tower, and M. C. Hardee, as individuals and as copartners doing business under the firm name and style of the White Eock Quarry Company, who have been duly summoned herein; and for cause of action says:
“For that, whereas, at the time of the, institution of this suit the said defendants were and still are indebted to the plaintiffs in the sum of $3,756.24 for:
“1. Money payable by the said defendants to the plaintiffs for «goods, wares, and merchandise sold and delivered by the plaintiffs to U1 defendants;
“2. And in a like sum upon an account stated between the plaintiffs and defendants;'
“3. And in a like sum for moneys lent by the plaintiffs to the defendants at their request;
“4. And in a like sum for moneys received by the defendants for the use of the plaiptiffs; “5. And in a like sum for work done and materials furnished by the plaintiffs to the defendant's at the defendants’ request.
“Plaintiff avers that although said sums of money are .long since past due, yet the defendants have failed and refused to pay the same or any part thereof.
“Wherefore, plaintiffs sue and allege their damages by reason of the premises in the. sum of |5,000.00”
“Exhibit A” contains items entered from August 31, 1916, to December 30, 1917. Thomas Brewer and J. W. Thompson were added as defendants. Judgment was rendered against the defendants as copartners for a stated amount, and the defendants took writ of error. The defendants were stockholders of a supposed corporation in the forming of which the statutory requirement that duplicate affidavits by the treasurer that ten per cent, of the capital stock had been subscribed and paid shall be filed with the Secretary of State and Clerk of the Circuit Court of the county wherein the principal place of business is located, had not been complied with. Sec. 2652, Gen. Stats 1906, Compiled Laws, 1914. In such cases the statute provides that “the stockholders shall be personally liable for all the corporate debts as if they were members of p general partnership and not stockholders of a corpor. 'ion.” Sec. 2652, Gen. Stats. 1906, Compiled Laws, 191 . The liability being that of “members of a general partnership,” the rules of partnership liability at common law govern. See Winfield Packing Co. v. Truitt, 71 Fla. 38, 70 South. Rep. 775; Mechanics & Metals Nat. Bank v. Angel, 79 Fla. 761, 85 South. Rep. 675.
The action being against the defendants “as individuals and as copartners,” the liability of all as alleged must be shown. Rentz v. Live Oak Bank, 61 Fla. 403, 55 South. Rep. 856.
It appears that some of the defendants were not stockholders when some of the items of indebtedness were incurred, and as under the statute their liability is that of partners and not stockholders, the liability of each is not joint, no special agreement or drcumstanoes imposing joint liability on all of the defendants being shown. All the defendants not being jointly liable for all the items a joint judgment against all of them is erroneous.
Judgment reversed.
Browne, C. J., and Taylor, Ellis and West, J. J., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
-
Merchs. & Mechanics Bank v. Sample, 98 Fla. 759 (Fla. 1929)…hanging the rule. See Rentz v. Live Oak Bank, 61 Fla. 403, 55 So R. 856; Tomlinson v. Peninsular Naval Stores Co., 61 Fla. 453, 55 So. R. 548; Mechanics and Metals Nat. Bank of City of New York v. Angel, 79 Fla. 761, 85 So. R. 675; Graham v. Sewell, 80 Fla. 720, 86 So. R. 639; 11 Stand. Ency. Proc. 1049.” In Freeman on Judgments, 5th Ed., page 189, it is said: ‘ ‘ If plaintiff alleges a joint contract he must prove it, in order to recover against any of the defendants. Where a joint liability is charged…
-
Jonas v. Burks, 87 Fla. 68 (Fla. 1924)…. See Rentz v. Live Oak Bank, 61 Fla. 403, 55 South. Rep. 856; Tomlinson v. Peninsular Naval Stores Co., 61 Fla. 453, 55 South. Rep. 548; Mechanics and Metals Nat. Bank of City of New York v. Angel, 79 Fla. 761, 85 South. Rep. 675; Graham v. Sewell, 80 Fla. 720, 86 South. Rep. 639; 11 Stand. Eney. Proc. 1049. The evidence in this case is not sufficient to sustain a verdict against the defendants jointly. There was no [*71] evidence of the relations existing between the two defendants and the evidence was…
-
Markley v. Riley, 91 Fla. 1029 (Fla. 1926)…Anderson and Leonard were not liable for items of indebtedness incurred after May 21, 1921. The joint judgment against all the defendants for the entire account is erroneous. See Winfield v. Truitt, 71 Fla. 38, 70 South. Rep. 775; Graham v. Sewell, 80 Fla. 720, 86 South. Rep. 639; Mechanics & Metals Nat. Bank of City of New York v. Angel, 79 Fla. 761, 85 South. Rep. 675; Charles v. Young, 74 Fla. 298, South Rep. 869. Reversed. Whitfield, Terrell and Buford, J. J., concur; Brown, C. J., and Ellis, J., C…
Authorities Cited
- Rentz v. Live Oak Bank, 61 Fla. 403 (Fla. 1911)
- Winfield v. Truitt, 71 Fla. 38 (Fla. 1916)
- The Mechanics & Metals Nat'l Bank of the City of N.Y. v. Angel, 79 Fla. 761 (Fla. 1920)