E. C. ROPER, INC., ET AL.,
v.
WILSON & TOOMER FERTILIZER COMPANY
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E. C. Roper, Inc. appealed a judgment on a promissory note, arguing the corporation lacked authority (ultra vires) to assume an individual's debt. The Florida Supreme Court held that when a corporation acquires a business and its assets, it may validly assume pre-existing debts as part of the consideration for that acquisition, even without express charter authorization.
A corporation may validly assume a pre-existing individual debt without express charter authorization when the assumption is made as consideration for the corporation's acquisition of the individual's business and assets. The assumption of such debt may be express or implied and need not be limited to assumption to the transferor alone but may extend to the transferor's creditors at the transferor's request.
“A corporation has no right to assume a debt of another where not authorized by its charter to do so, except for a sufficient consideration and in furtherance of its corporate objects. But the rule does not apply where the corporation takes over the assets of the business of an individual or co-partnership, and in consideration thereof gives its mote or obligation as part of the transaction involving what is taken over by it.”
Establishes the exception to the ultra vires doctrine when a corporation acquires business assets
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Join FLexlaw to unlock all legal intelligenceE. O. Roper, Inc. executed a promissory note that was endorsed by E. O. Roper, its president. The note was given to a creditor of an individual who ha…
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This was a suit at law in which the declaration declared on a promissory note executed by E. O. Roper, Inc., and endorsed by E. O. Roper, its president. The pleadings and evidence may be said to present the proposition whether or not a corporation can maintain the defense of ultra vires to a cause of action based on its' promissory note as sued on,- where it is shown that the note was executed by it to a creditor of an individual who, while himself indebted to the payee of the note, conveyed his' business and propertiés used therein to the corporation maker of the note in consideration of the corporation’s giving the note to the individual’s creditor to represent the individual debt for which the corporation had become liable anyway as the grantee or assignee of the individual’s business and assets, in consideration of the conveyance of which to the corporation, the note was executed. The Circuit Court rendered judgment for the plaintiff. The corporation has appealed.
A corporation has no right to assume a debt of another where not authorized by its charter to do so, except for a sufficient consideration and in furtherance of its corporate objects. But the rule does not apply where the corporation takes over the assets of the business of an individual or co-partnership, and in consideration thereof gives its mote or obligation as part of the transaction involving what is' taken over by it, whether such note or obligation be given *798to the person or partnership whose assets have been taken: over, or to a third party at the transferor’s instance or request. Western National Bank v. Wittman, 31 Cal. App. 615, 161 Pac. Rep. 137; Leckie v. Bennett, 160 Mo. App. 145, 141 S. W. Rep. 706; Curtis, Jones & Co. v. Smelter Nat. Bank, 43 Colo. 391, 96 Pac. Rep. 172. Assumption, of the pre-existing individual debt or liability as a consideration for the enjoyment of what is received by a corporation in a transfer of assets to it, may be express' or implied. Ziemer v. C. C. Bretting Mfg. Co., 147 Wis. 252, 133 N. W. Rep. 139, 25 Ann. Cas. 1912-D 1275; McPike v. Kardell Motorcar Co., (Mo. App.) 213 S. W. Rep. 904.
If technical errors were committed by the court in its rulings on pleadings in the case, the record as' a whole shows that the judgment rendered accords with justice in the premises, and that a reversal of the cause for the correction of such technical errors as may have occurred must inevitably lead to the rendition of a new judgment identical with that now appealed from, so reversal is not authorized under our statutes, Section 4499 C. G. L., 2812 R. G. S.,. relating to the eflect of harmless errors.
Affirmed.
Davis, C. J., and Ellis, and Terrell, J. J., concur.
Whitfield, P. J., and Brown and Buford, J. J., concur in the opinion and judgment.
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Barnes v. Liebig, 146 Fla. 219 (Fla. 1941)…e latter is liable for the debts, contracts and torts of the former. 7 Fletcher-Cyclopedia of Corporations 8388, Sec. 4750. See also Polk County Lumber Co. v. Dwiggins, 100 Fla. 559, 129 So. 859; E. O. Roper, Inc., v. Wilson & Toomer Fertilizer Co., 116 Fla. 796, 156 So. 883; Mallory S. S. Co. v. Baker & Holmes Co., 117 Fla. 196, 157 So. 504. Under these rules of law, it would appear that the allegation of the liability of the absorbing corporation for the tort of the constituent corporation is sufficient…
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Special v. Ivo Baux, M.D., 79 So. 3d 755 (Fla. 4th DCA 2011)…arly harmless error jurisprudence, and harkens back to Florida’s earlier application of the orthodox English rule.11 The same outcome oriented analysis also prevailed in some early civil cases. In E.O. Roper, Inc. v. Wilson & Toomer Fertilizer Co., 116 Fla. 796, 156 So. 883 (1934), the Supreme Court held that even if the trial court committed technical errors, under the harmless error statute, its judgment would not be set aside where the record as a whole shows that the judgment rendered accords with jus…
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C. & H. Contractors, Inc. v. Leo P. McKEE in Bankr. for Cate Contractors, Inc., 177 So. 2d 851 (Fla. 2d DCA 1965)…ssets where sufficient consideration is given and the act is in the furtherance of its corporate objects. C. B. Rouss, Inc. v. Cooper, In re W. H. Swan & Co., Inc., 5 Cir.1934, 69 F. 2d 671; E. O. Roper, Inc. v. Wilson & Toomer Fertilizer Co., 1934, 116 Fla. 796, 156 So. 883; Kraft v. Spencer Tucker Sales, Inc., 1952, 39 Wash.2d 943, 239 P. 2d 563; 19 C.J.S. Corporations § 1235. Such assumption may be either express or implied from the circumstances. E. O. Roper, Inc. v. Wilson & Toomer Fertilizer Co., supr…
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