INTERNATIONAL DESIGN, INC., A FLORIDA CORPORATION, APPELLANT,
v.
RUBIN'S FRANCHISES, INC., A FLORIDA CORPORATION, APPELLEE
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International Design sued Elliott Roosevelt and others as promoters of a corporation for breach of a contract for professional services. The trial court granted judgment on the pleadings against International Design, but the appellate court reversed, holding that promoters are primarily liable for pre-incorporation contracts and that the complaint, though defective in form, stated a cognizable cause of action that should have been subject to amendment rather than dismissal.
The court held that promoters are primarily liable for pre-incorporation contracts unless they can show the other party agreed to look solely to the corporation for recourse. The complaint, despite being technically defective in failing to set forth a short and plain statement of ultimate facts as required by the rules of civil procedure, stated a viable cause of action. The trial court erred in granting judgment on the pleadings because doing so precluded the plaintiff from amending the defective complaint.
[1] Promoters of a corporation to be formed are primarily liable for contracts entered into on behalf of the corporation unless the other party agrees to look solely to the f…
[2] A complaint alleging a contract with promoters for a corporation to be formed, which is evidenced by a contract signed by one promoter, may be interpreted as an action ag…
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Join FLexlaw to unlock all legal intelligence“the liability of the promoter is treated as primary, not as a guarantee”
Establishes that promoters have primary liability for pre-incorporation contracts, distinguishing promoter liability from guarantee liability.
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Join FLexlaw to unlock all legal intelligenceInternational Design alleged that Elliott Roosevelt and others were promoters of a Florida corporation to be formed (Rubin's, Inc. or Rubin's Franchis…
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These appeals are from a final judgment which granted appellee Elliott Roosevelt’s motion for judgment on the pleadings and an order denying, appellant, International Design’s motion for rehearing and motion for permission to file an amended complaint. The appeals have been consolidated for all appellate purposes. Appellant’s complaint was against Roosevelt and others as promoters of a corporation to be formed. The complaint is too abbreviated to be in good form, but alleged in numbered paragraphs as follows:
1) The defendants were promoters for a Florida corporation to be formed and named Rubin’s, Inc. or Rubin’s Franchises, Inc.
2) On or about July 18, 1969, the individual defendants in behalf of the corporation to be formed entered into a contract with the plaintiff for the professional services of the plaintiff.
3) The corporation was formed, and thereafter
4) the plaintiff performed under the contract.
5) The defendants refused to pay plaintiff for his services.
The complaint attached to it a written contract which was in fact signed by only one of the named defendants, it was signed “Rubins, Inc. by Harry W. Jehle.”
Appellees answered the complaint and denied the essential allegations and presented two affirmative defenses: 1) That the complaint failed to state a cause of action; 2) “the alleged contract attached to the contract marked exhibit “A” is not enforceable against Elliott Roosevelt inasmuch as said contract falls within the provisions of Florida Statutes § 671.206, 672.201 and/or 725.01, [F.S.A,]”
The trial judge entered final judgment upon the pleadings pursuant to a motion by the appellee, Roosevelt. In the final judgment, the court set forth the grounds for the judgment as follows:
“1. That the complaint is an action upon a written contract between the plaintiff and a purported Florida corporation, Rubin’s, Inc.
2. That one HARRY W. JEHLE signed the contract on behalf of Rubin’s, Inc.
3. That nowhere in said contract does the name ELLIOTT ROOSEVELT appear.”
We think that the trial court misconceived the nature of appellant’s complaint. It is treated entirely as a complaint upon a written contract of a corporation called Rubin’s, Inc. A reading of the complaint at least allows for the interpretation urged by the appellant that the action was not upon the written contract but upon the contract of the promoters which was evidenced by the contract signed by one of them. The liability of promoters for the debts of a corporation to be formed has been the subject of several appellate cases in Florida. In all of them it seems clear that the liability of the promoter is treated as primary, not as a guarantee, cf. Nichols v. Bodenwein, 107 Fla. 25, 146 So. 86, 659 (1932); Bean v. Harris, Fla.App.1968, 212 So.2d 368; Akel v. Dooley, Fla.App.1966, 185 So.2d 491; Katz v. Kenholtz, Fla.App.1962, 147 So.2d 342.
We hold that the contract in question is one which does not fall within the statute of frauds as a contract of guarantee. Plaintiff alleged that defendant Roosevelt was one of the promoters of a corporation to be formed' and that plaintiff entered into a contract with the promoters. Under such circumstances, the *780promoter is primarily liable unless the promoter can show that the other party agreed to look only to the corporation which was to be formed for his recourse. Bean v. Harris, supra.
We are impressed with the fact that while the complaint had within it the germ of the cause of action it was not in conformity with RCP 1.110(b) (2), 30 F.S.A., in that it did not set forth “a short and plain statement of the ultimate facts. * * *” We therefore hold that the trial court did not err in dismissing the complaint but that he did err in entering the final judgment on the pleadings which effectively precluded appellant from amending the technically defective complaint. RCP 1.110(d) and 1.190. We reverse the judgment appealed and remand the cause with directions to enter an order dismissing appellant’s complaint and granting an appropriate time to file an amended complaint.
Reversed and remanded.
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Fla. AIR Conditioners, Inc. v. Colonial Supply Co., 390 So. 2d 174 (Fla. 5th DCA 1980)…on of this cause on its merits. REVERSED. ORFINGER and FRANK D. UP-CHURCH, Jr., JJ., concur. .Nichols v. Bodenwein, 146 So. 86 (Fla.1932); Akel v. Dooley, 185 So. 2d 491 (Fla. 2nd DCA 1966); International Design, Inc. v. Rubin’s Franchises, Inc., 247 So. 2d 778 (Fla. 3rd DCA 1971); Katz v. Kent Kenholtz, 147 So. 2d 342 (Fla. 3rd DCA 1962). Independent of the inapplicable § 607.397, Fla.Stat., there may be other statutory bases for personal liability under the circumstances of this case. See § 608.59, Fla.…
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Ratner v. Cent. Nat'l Bank OF Miami, 414 So. 2d 210 (Fla. 3d DCA 1982)…c., 319 So. 2d 43 (Fla. 2d DCA 1975); Bean v. Harris, 212 So. 2d 368 (Fla. 3d DCA 1968), cert. denied, 219 So. 2d 699 (Fla.1968); Katz v. Kenholtz, 147 So. 2d 342 (Fla. 3d DCA 1962). See, e.g., International Design, Inc. v. Rubin's Franchises, Inc., 247 So. 2d 778 (Fla. 3d DCA 1971); § 607.397 Fla.Stat. (1979). The later formation of the corporation and subsequent adoption or ratification of the contract by the corporation does not necessarily release a promoter from liability, but may result in joint liabili…
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Goppert v. Goppert, 642 So. 2d 589 (Fla. 4th DCA 1994)…may be entitled to some relief. Unfortunately, it was not presented with the option of denying appellee’s motion, but dismissing the supplemental petition, with leave to amend, as suggested by International Design, Inc. v. Rubin’s Franchises, Inc., 247 So. 2d 778, 780 (Fla. 3d DCA 1971). On remand, we direct the trial court to do so. GLICKSTEIN and WARNER, JJ„ concur. FARMER, J., concurs specially with opinion. . The judgment stated that the husband was to pay rehabilitative alimony to the wife in the amo…
Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Effie Smith Nichols v. Bodenwein, 107 Fla. 25 (Fla. 1932)
- Katz v. Kenholtz, 147 So. 2d 342 (Fla. 3d DCA 1962)
- Akel v. Dooley, 185 So. 2d 491 (Fla. 2d DCA 1966)
- Bean v. Harris, 212 So. 2d 368 (Fla. 3d DCA 1968)