SAMUEL B. KRASNY ET UX., ET AL., APPELLANTS,
v.
MILTON W. RICHTER AND LOUIS H. HAUSER, APPELLEES
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Shareholders who purchased corporate stock in violation of Florida's Uniform Sale of Securities Law sought rescission and return of their purchase price. The court affirmed a jury verdict for the defendants, holding that the shareholders were estopped from rescinding the sale because they participated in corporate management through their designated director representative.
The court held that shareholders may be estopped from claiming their stock purchase void under Florida's securities law when they participate in corporate affairs through an agent or designated representative, just as they would be if they participated personally as officers and directors with control over fund disposition.
“The purchaser of stock may, by directly participating in the corporation as an officer and director and by having control over the disposition of funds after becoming a stockholder, be estopped to claim his purchase of stock void under the provisions of Fla.Stat. Chapter 517, F.S.A.”
Establishes the basic estoppel doctrine applicable when stockholders participate directly in corporate management
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Join FLexlaw to unlock all legal intelligenceMrs. Ladden approached the defendants about participating in their business venture and enlisted friends and relatives to invest. A stockholders' agre…
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The plaintiffs in the trial court appeal an adverse judgment after á jury trial. The appellants brought action for the return of money paid for corporate stock claiming that the sale was voidable because it violated provisions of Fla.Stat. Chapter 517, F.S.A., The Uniform Sale of Securities Law.
Appellees’ answer raised the affirmative defense of estoppel, the principal issue at the trial. The jury found for the ap-pellees; therefore, on this appeal all testimony and proper inferences from the testimony must be viewed in a light most favorable to the appellees. Thus viewed the only substantial question presented on this appeal is whether there was sufficient evidence upon which the jury could have found that the participation of a Mrs. Lad-*613den as a director of the corporation was the participation of the entire group of investors.
The evidence supports a finding that Mrs. Ladden approached the defendants seeking to participate in their business venture; that she interested some of her friends and relatives in participating with her; that a stockholders’ agreement was drawn providing that the investing group would have the right to designate a director, and the group designated Mrs. Ladden; that the investing group employed an attorney who advised that the transaction was exempt from the provisions of Chapter 517 F.S.A. Fla.Stat.; that Mrs. Ladden as the representative of the investing group participated in the corporate management from October 1963 to January 1964; and that the corporation retrogressed from good business prospect to failure during this period.
The purchaser of stock may, by directly participating in the corporation as an officer and director and by having control over the disposition of funds after becoming a stockholder, be estopped to claim his purchase of stock void under the provisions of Fla.Stat. Chapter 517, F.S.A. Popper v. Havana Publications, Inc., Fla.App. 1960, 122 So.2d 247; Harrison v. McCourtney, Fla.App.1962, 148 So.2d 53. We know of no reason why the doctrine of estoppel should not be applied where the buyer, rather than participate personally, participates in corporate affairs through an agent. Appellants urge that this application of the doctrine of estoppel would be an extension which should not be made because of public policy. We cannot say that the public policy of Florida is that a purchaser of stock who participates directly in corporate affairs should be estopped to rescind the sale of stock and recover the purchase price but that a purchaser who designates a representative to act for him in corporate affairs should not be so estopped. Cf. DePolo v. Greig, 338 Mich. 703, 62 N.W.2d 441, 443 (1954).
Appellants’ point directed to jury instructions given is not well taken. See Henningsen v. Smith, Fla.App.1965, 174 So.2d 85; Seminole Shell Co. v. Clearwater Flying Co., Fla.App.1963, 156 So.2d 543.
Affirmed.
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Emmett Reeder v. Edward M. Chadbourne, Inc., 338 So. 2d 271 (Fla. 1st DCA 1976)…stimony of H. T. Smith, an intended rebuttal witness for the plaintiff. In reviewing a jury verdict an appellate court is required to weigh all inferences, facts and testimony in the light most favorable to the appellee, Krasny v. Richter, Fla.App., 211 So. 2d 612 (1968). The trial court refused to allow the testimony of H. T. Smith because of the claim of surprise by the defense attorneys and the disclosure by Smith that he thought he knew one of the jurors. In regard to the allegation of surprise, defendan…
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Fountainhead Motel, Inc. v. Massey, 336 So. 2d 397 (Fla. 3d DCA 1976)…om an adverse judgment after a jury verdict, an appellate court must view the record and all reasonable inferences therefrom in the light most favorable to the appellee. See Graves v. Wiggins, 257 So. 2d 268 (Fla.3d DCA 1972), and Krasny v. Richter, 211 So. 2d 612 (Fla.3d DCA 1968); and 2 Fla.Jur., Appeals § 308. [*399] We have considered the record, all points in the briefs, and arguments of counsel in the light of the controlling principles of law, and have concluded that no reversible error has been demons…
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Minn. Mut. Life Ins. Co. v. Candelore, 416 So. 2d 1149 (Fla. 5th DCA 1982)…ble inferences will be drawn from the evidence in favor of the party who has convinced the jury. Underwriters Nat’l Assurance Co. v. Harrison, 338 So. 2d 58 (Fla. 3d DCA 1976); Graves v. Wiggins, 257 So. 2d 268 (Fla. 3d DCA 1972); Krasny v. Richter, 211 So. 2d 612 (Fla. 3d DCA 1968). This is especially true where that convincing party was the plaintiff who had to prove her case by a preponderance of the evidence. The evidence showed that Joseph Cande-lore was a man of thirty-five years, happily married, a fa…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Harrison v. McCOURTNEY, 148 So. 2d 53 (Fla. 2d DCA 1962)
- Henningsen v. Smith, 174 So. 2d 85 (Fla. 2d DCA 1965)
- Seminole Shell Co., Inc. v. Clearwater Flying Co., Inc., 156 So. 2d 543 (Fla. 2d DCA 1963)
- Gwenn Popper v. Havana Publ'ns, Inc., 122 So. 2d 247 (Fla. 3d DCA 1960)