LAWRENCE NELSON ET AL., APPELLANTS,
v.
IRVING MILLER, LEONARD MILLER, IRWIN S. REVER AND MILLER GAS CO., A FLORIDA CORPORATION, APPELLEES
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Former stockholders of a dissolved Florida corporation sought to maintain a derivative action to recover lost corporate assets four years after the corporation was dissolved for non-payment of capital stock tax. The court held that dissolved corporations lose the capacity to sue except for limited purposes, and therefore stockholders cannot maintain derivative actions on behalf of a dissolved corporation.
Former stockholders of a dissolved corporation may not maintain a derivative action to recover corporate assets. Upon dissolution, a Florida corporation's capacity to sue is limited to satisfying liabilities, selling property, and dividing remaining assets among stockholders, and this limited existence cannot support derivative litigation by shareholders.
“the purpose of satisfying its liabilities, selling and conveying its property and dividing the net remaining assets among the stockholders but for no other purpose.”
Establishes the limited purposes for which a dissolved Florida corporation may continue to exist under statute.
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Join FLexlaw to unlock all legal intelligenceA Florida corporation was dissolved in 1962 for failure to pay capital stock tax as required by Florida law. No attempt was made to restore the corpor…
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This is an appeal by the plaintiff below from an order of the trial court dismissing his third amended complaint with prejudice. The sole' question for determination is whether former stockholders of a Florida corporation, which has been dissolved four years previously for non*67payment of corporate stock tax, may maintain a stockholder’s derivative action to recover lost assets of the corporation. We agree with the trial court that they may not, and accordingly, affirm.
It is admitted by appellant that the corporation in question was dissolved in 1962 for failure to pay capital stock tax as required by §§ 608.33, 608.36, Fla.Stat., F.S.A. There has been no attempt to restore the corporation to its former status pursuant to § 608.37, Fla.Stat., F.S.A. The initial complaint in this action was filed in 1966.
Upon dissolution, a Florida corporation may continue as a body corporate for a period of three years for specific purposes, which are according to § 608.-30(1), Fla.Stat., F.S.A.:
“ * * * the purpose of satisfying its liabilities, selling and conveying. its property and dividing the net remaining assets among the stockholders but for no other purpose.” (Emphasis ours.)
Similarly, according to the provisions of § 608.35, Fla.Stat., F.S.A.:
“Any corporation failing to file the annual report with the state revenue commission and pay the capital stock tax as required in § 608.33, within six (6) months of the date required herein for filing the return and paying said tax shall not he permitted to maintain or defend any action in any court of this state until such reports are filed and all taxes due under part I of this chapter are paid.”
However, these statutes allowing a limited corporate existence subsequent to dissolution must be strictly construed as they are in derogation of the common law rule that upon dissolution a corporation was for all purposes extinct. Fleischer v. W. P. I. X., Inc., 30 Misc.2d 17, 213 N.Y.S.2d 632. It is obvious, then, that the corporation itself, once dissolved, could not maintain this suit.
The fate of the stockholder’s cause of action in a derivative suit is inexorably bound to the scope of rights enforceable by the corporation. The cause of action resides in the corporate entity, not in the individual shareholder plaintiff. The corporation is the real party in interest. Koster v. (American) Lumbermens Mutual Casualty Co., 330 U.S. 518, 67 S.Ct. 828, 91 L.Ed. 1067; Citizens National Bank v. Peters, Fla.App.1965, 175 So.2d 54. Having determined that the dissolved corporate body in question may not maintain the instant suit, it follows as a logical consequence that the ability to do so will likewise be denied to the stockholders who are plaintiffs here. Accordingly, the order dismissing the complaint with prejudice is hereby affirmed.
Affirmed.
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Cosmopolitan Distribs., Inc. v. Lehnert, 470 So. 2d 738 (Fla. 3d DCA 1985)…5) does not render meaningless the provisions of section 607.297, which limits the bringing or defending of an action by a dissolved corporation, which has never been reinstated, to three years from the date of its dissolution. See Nelson v. Miller, 212 So. 2d 66 (Fla. 3d DCA 1968). Further, the present decision can be reconciled with this court’s holding in Haitian Ventures v. Wisniewski, 376 So. 2d 424 (Fla. 3d DCA 1979). In Haitian Ventures we held that a dissolved corporation could not intervene in a law…
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Charles "Bebe" Rebozo v. Royal Indem. Co. & Baldwin Ins. Agency, Inc., 369 So. 2d 644 (Fla. 3d DCA 1979)…26 (Fla.1977), this court held that Rebozo’s personal excess policy with United States Fire did not cover the judgment against Washwell, Inc. .The appellees cite such cases as Fried v. Easton, 293 So. 2d 87 (Fla. 3d DCA 1974), and Nelson v. Miller, 212 So. 2d 66 (Fla. 3d DCA 1968). But see Dubbin v. Touche Ross & Co., 324 So. 2d 128 (Fla. 3d DCA 1975), cert. denied, 336 So. 2d 1181 (Fla.1976) (quoting exception that “[a] stockholder may bring a suit in his own right to redress an injury sustained direct [*6…
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Schein v. Chasen, 313 So. 2d 739 (Fla. 1975)…n to seek redress for such act.” Cf. Maronek v. Atlantis Hotel, Inc., supra; Orlando Orange Groves Co. et al. v. Hale, 119 Fla. 159, 161 So. 284 (1935); Seestedt v. Southern Laundry, Inc. et al., 149 Fla. 402, 5 So. 2d 859 (1942); Nelson v. Miller, 212 So. 2d 66 (Fla.App.3, 1968); Conlee Construction Co. v. Cay Construction Co., 221 So. 2d 792 (Fla.App.4, 1969). See also, Stone et al. v. Holly Hill Fruit Products, Inc. et al., 56 F. 2d 553 (C.C.A.5, 1932); Duchaine et al. v. Grosco Realty, Inc., 121 So. 2d…1 / 2
Previewing 3 of 10 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Koster v. (american) Lumbermens Mut. Cas. Co., 330 U.S. 518 (U.S. 1947)
- Citizens Nat'l Bank OF ST. Petersburg v. Peters, 175 So. 2d 54 (Fla. 2d DCA 1965)