THE OUTLET COMPANY, A FOREIGN CORPORATION, APPELLANT,
v.
ROBERT WADE, ROBERT S. WALSH AND RICHARD D. LUNDY, INDIVIDUALLY AND D/B/A ADVANTAGE CONSULTANTS, APPELLEES
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The Outlet Company appealed a judgment finding that Robert Wade was not a general partner in Advantage Consultants and therefore not personally liable for the partnership's debts. The court affirmed, holding that without evidence the creditor relied on Wade's individual credit, Wade could not be bound as a general partner under Florida's limited partnership law.
Wade was not liable as a general partner because there was no evidence that The Outlet Company relied on or had a right to rely on Wade's individual credit when extending credit to the partnership. Under Florida's limited partnership law, a person who contributes capital and has some control does not automatically become bound for the partnership's obligations absent creditor reliance on that person's individual creditworthiness.
[1] A person contributing to the capital of a business and acquiring an interest in profits and some control is not bound for the business's obligations if creditors had no r…
[2] Florida statutes governing limited partnerships are not to be strictly construed as in derogation of the common law.
Previewing 2 of 3 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“no public policy requires a person who contributes to the capital of a business, acquires an interest in the profits and some degree of control over the conduct of the business, to become bound for the obligations of the business, provided creditors had no reason to believe at the times their credits were extended that such person was so bound”
Establishes the foundational principle that limited partners are not automatically liable absent creditor reliance on their creditworthiness
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Join FLexlaw to unlock all legal intelligenceThe Outlet Company extended credit to Advantage Consultants, an advertising agency partnership. Robert Wade was involved with Advantage Consultants bu…
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HERSEY, GEORGE W., Ill, Associate Judge.
This is an appeal from a final judgment determining the appellee-defend-ant, Robert Wade, not to be a general partner in Advantage Consultants, an advertising agency partnership, and thus, not to be liable for the debts of the partnership. The liability of the partnership to plaintiff-appellant was established; however, there was no evidence that appellant relied or had a right to rely on the individual credit of appellee, Robert Wade.
In Vulcan Furniture Manufacturing Corp. v. Vaughn, 168 So. 2d 760, 764 (Fla.2d DCA 1964), the court pointed out:
. It has been stated that the uniform limited partnership act proceeds on the assumption that no public policy requires a person who contributes to the capital of a business, acquires an interest in the profits and some degree of control over the conduct of the business, to become bound for the obligations of the business, provided creditors had no reason to believe at the times their credits were extended that such person was so bound.
Section 620.28, Florida Statutes (1977), a part of Florida’s Limited Partnership law, provides:
(1) The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this part.
[*DCCCIII] This may be taken to mean that a limited partnership may exist in Florida without strict compliance with the statute although the limited partnership was not recognized at common law. Such was the situation in the case at bar. Accordingly, the judgment appealed from is affirmed.
LETTS, GAVIN K. and MOORE, JOHN H., II, Associate Judges, concur.
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Citator
Authorities Cited
- Bd. OF Cnty. Comm'rs OF Okaloosa Cnty. v. Burleson, 168 So. 2d 760 (Fla. 1st DCA 1964)